November 21, 2006

 

CBOT Soy Outlook on Tuesday: Seen up on e-CBOT theme, technical buying

 

 

Chicago Board of Trade soybean futures are seen opening Tuesday's day session moderately higher, feeding off overnight price strength with technical activity featured attractions.

 

Soybean futures are called to open 1 to 3 cents higher.

 

In e-CBOT trade, January soybeans were 2 1/4 cents higher at US$6.69 3/4 and March was 3 1/4 cents higher at US$6.83 1/4 per bushel.

 

The market is seen up in unison with the overnight theme, as a quiet news front keeps speculative interest a dominate feature in the market, analysts said.

 

Light technical buying is seen leading prices higher, with underlying strength from soyoil aiding the supportive tonnee, traders added. However, choppy activity may be in play as traders square positions ahead of the Thanksgiving holiday in the last full trading session of the week, a broker said.

 

CBOT day session grain markets will close at 12:00 p.m. CST Wednesday and Friday. On tap for Tuesday, options on December soymeal and soyoil expire on the close.

 

Meanwhile, a technical analyst said bullish upside momentum remains intact, with the next upside price objective for January soybeans is to close prices above solid chart resistance at the contract high of US$6.82 1/2 a bushel. The next downside price objective is closing prices below solid support at US$6.50.

 

First resistance for January soybeans is seen at US$6.70 and then at Monday's high of US$6.77. First support is seen at Monday's low of US$6.62 1/2 and then at US$6.60.

 

Monday afternoon in its weekly crop progress report U.S. Department of Agriculture said 96% of the U.S. soy crop was harvested as of Sunday, compared to 99% in 2005 and the five-year average of 97%. Analysts expected the harvest between 95-97% complete.

 

The DTN Meteorlogix weather forecast said scattered thundershowers may return to Argentina's crop belt during the coming weekend. This will maintain favorable conditions for crops. In Brazil, replanting of some washed out fields may be needed after heavy storms likely caused flooding in Rio Grande Do Sul during the past weekend. Meanwhile, the northern soybean areas of Brazil continues to trend drier, under a hot and dry weather pattern, Meteorlogix reports.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Tuesday. Spot cash soybean bids were down 2 cents in Keokuk, IA, down 4 cents in Quincy, Ill., and up 1-cent in Frankfort, Ind., according to cash sources Tuesday.

 

Rotterdam soybeans were higher and soymeal was mixed. European vegoils were mixed.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Tuesday, pressured by growing supplies on the spot market. The most active May 2007 contract settled RMB21 lower at RMB2,951 a metric tonne, after trading between RMB2,920/tonne and RMB2,982/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Tuesday after a volatile session amid uncertainty over the sustainability of a recent rally. The benchmark February contract ended at MYR1,871 a metric tonne, up MYR7 from Monday.