November 8, 2005

 

CBOT Soy Outlook on Tuesday: Flat to up 2 cents; following e-CBOT trend

 

 

Soybean futures on the Chicago Board of Trade are called to open firmer Tuesday, in tune with the overnight theme amid ideas recent declines were a bit overdone.

 

Analysts call soybeans to open flat to 2 cents per bushel higher.

 

In overnight electronic trade, November soybeans were 1/2 cent higher at US$5.72 a bushel, January soybeans were 1 1/4 cent higher at US$5.84 1/4, December soymeal was US$2.10 lower at US$174.10 and December soyoil was 7 points higher at 22.74 cents per pound.

 

A quiet news front and light positioning ahead of Thursday's crop report is expected to generate mild short interest as the market hovers in a range awaiting fresh inputs to direct prices, analysts said.

 

Nevertheless, traders anticipate only limited upside potential as near term fundamental and technical outlooks remain weak. Thursday's crop report continues to overhang prices with a lagging export pace and bird flu concerns adding to the defensive mindset of participants, analysts added.

 

Technical analyst Jim Wyckoff said market bulls have lost any near-term technical momentum they gained last week following Monday's gap lower move on the daily bar chart and close near the session lows. It will take a close above the October high of US$6.11 to strongly suggest a harvest low is in place and that prices will trend at least sideways if not higher in the coming weeks, he added.

 

First resistance for January soybeans is seen at US$5.88 - Monday's high - and then at US$5.95. First support is seen at US$5.80 and then at US$5.75.

 

The average of trade estimates from a survey of industry analysts by Dow Jones Newswires peg 2005 production at 3.016 billion bushels, up from the U.S. Department of Agriculture's October projection of 2.967 billion. The average guess among analysts in the survey pegged the 2005-06 carryout at 313 million bushels from a range of 270 million to 351 million. USDA in October estimated ending stocks at 260 million bushels.

 

Meanwhile, harvest activity neared completion with the USDA reporting late Monday 96% of the U.S. soybean crop had been harvested as of Sunday. The harvest figure compares to last year's 87% and the five-year average of 91%. The harvest pace was in line with trade estimates that ranged from 95% to 97% complete.

 

A total of 335 delivery notices were posted against the November soybean contract, with the house account at Bunge Chicago stopping 96 lots and a customer account at RJ O'Brien stopping 111 lots. The last date assigned was Nov. 3.

 

In overseas markets, most soybean futures traded on the Dalian Commodity Exchange settled slightly lower Tuesday, as trading slowed on a lack of fresh leads. The benchmark May 2006 soybean contract edged down RMB2 to settle at RMB2,743 a metric tonne, after trading in a narrow range of RMB2,730-RMB2,749/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Tuesday after another day of sluggish, range-bound trading. The benchmark January CPO contract closed at MYR1,433 a metric tonne, up just MYR1 from Monday. The contract was confined to a narrow range of MYR1,425-MYR1,435 in thin trading today.

 

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