November 7, 2005

 

CBOT Soy Outlook on Monday: Down 2-4 cents; following e-CBOT theme

 

 

Soybean futures on the Chicago Board of Trade is seen opening on weak footing, continuing the overnight theme amid the absence of fresh supportive inputs to underpin prices.

 

Analysts call soybeans to open 2 to 4 cents per bushel lower.

 

In overnight electronic trade, November soybeans were 3 cents lower at US$5.77 1/2 a bushel, January soybeans were 2 3/4 cents lower at US$5.89 1/4, December soymeal was US$2.10 lower at US$176.20 and December soyoil was 11 points lower at 22.83 cents per pound.

 

Carryover weakness from Friday's declines, anticipation of a bearish crop report Thursday and lingering concerns over the impact of bird flu overseas on feed demand continues to overhang the market, said a CBOT commission house broker.

 

However, traders said technical action will continue to provide direction, with choppy activity expected to linger until Thursday's crop report. Generally firm cash basis levels amid the end of the fall harvest is expected to provide light support, but without new demand strength upside potential remains clouded, analysts added.

 

Technical analyst Jim Wyckoff said that while market bulls have gained more confidence that a harvest low is in place, the bears still have the overall technical advantage. A close above the October high of US$6.11 would strongly suggest a harvest low is in place and that prices will trend at least sideways if not higher on the coming weeks.

 

First resistance for January soybeans is seen at US$6.00 and then at US$6.04 - Friday's high. First support is seen at US$5.90 - Friday's low - and then at US$5.85.

 

Meanwhile, the DTN Meteorlogix Weather Service said little or no significant rainfall is expected throughout the major grain areas of Brazil during the next seven days under near to above normal temperatures. This situation will favor corn and soybean planting and wheat harvesting over southern areas but will increase stress to planted soybean in the north (Mato Grosso).

 

A total of 495 delivery notices were posted against the November soybean contract, with the house account at ADM Investor Services issuing 397 lots. The last date assigned was Nov. 2.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net long futures and options positions totaling 5,270 lots in soybeans and 15,230 contracts in soyoil as of Nov. 1. Large speculative traders were reported net short combined futures and options positions totaling 6,166 lots in soymeal.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT) and weekly crop progress reports at 3:00 p.m. CST (2100 GMT).

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled sharply lower Monday on a mix of long liquidation and short selling, pressured by renewed worries over bird flu outbreaks in China and Friday's fall in Chicago Board of Trade soybeans, analysts said. The benchmark May 2006 soybean contract lost RMB57 to settle at RMB2,745/tonne, after trading between RMB2,731-RMB2,774/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended a tad lower Monday after an extremely quiet, range-bound session. The benchmark January CPO contract closed at MYR1,432 a metric tonne, down MYR8 from Nov. 2, after moving in a narrow MYR1,429-MYR1,442/tonne range.

 

Rotterdam soybeans and soymeal prices were mostly lower, European vegoils were mixed.