November 22, 2005

 

CBOT Soy Outlook on Tuesday: Seen higher; taking cue from e-CBOT

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's session on firmer footing, taking their cue from the overnight session, with seasonal buying trends a featured attraction, traders said.

 

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

 

In overnight electronic trade, January soybeans were 2 1/2 cents higher at US$5.74 3/4, December soymeal was US$0.60 lower at US$173.30 and December soyoil was 10 points higher at 22.03 cents per pound.

 

Seasonally the market trades higher heading into the Thanksgiving day holiday, and without any fresh fundamental news traders are poised to square a few positions in the last full trading session of the week, said a CBOT commission house broker.

 

CBOT grain and oilseed markets close at 12:00 p.m. CST Wednesday and Friday and will closed on Thursday for the holiday.

 

However, analysts say traders will be on guard for potential price swings, with erratic trade a possibility in thinly traded holiday markets. Monday, futures experienced extremely low volume action, with pit traded activity reported at just over 35,000 contracts, based of preliminary volume figures released by CBOT.

 

Light support maybe generated from outside inflationary market influences, with crude oil, and gold and silver markets up strongly in early Tuesday action.

 

Nevertheless, lingering concerns over the spread of bird flu in Asia, favorable crop conditions in South America and a lagging export pace is expected to limit upside potential and keep prices hovering in range bound action, traders added.

 

Technical analysts say first resistance for January soybeans is seen at US$5.76 - Monday's high - and then at US$5.80. First support is seen at US$5.69 - last week's low - and then at US$5.65 1/2.

 

The DTN Meteorlogix weather forecast said rainfall prospects for Brazil's major soybean belt are a bit less Tuesday than were indicated on Monday, but overall crop conditions in Brazil are favorable due to some good rains during the past five days.

 

Argentina is still in line for up to one inch of rain Tuesday through Thursday, followed by dry weather over the weekend, and another round of showers and thunderstorms next week. Argentina's main corn and soybean areas are having a very favorable weather pattern so far this growing season, Meteorlogix said. Tuesday marks the last trading day for options on December soymeal and soyoil futures, the contracts expire at 1:15 p.m. CDT.

 

In news, signs of a bird flu infection were found at a poultry farm in northern Japan Tuesday, the latest in a series of avian flu cases that led to culling about 1.6 million chickens over the past few months in the region, an official said.

 

In overseas markets, most Dalian Commodity Exchange soybean futures settled slightly higher Tuesday after falling over the past five trading days, thanks to a small rise overnight in Chicago Board of Trade soybeans. The benchmark May 2006 soybean contract gained RMB6 to settle at RMB2,663 a metric tonne  after trading between RMB2,653 and RMB2,670/tonne .

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower Tuesday, amid lingering concerns about slowing exports, but the benchmark contract stayed above a key support level. The benchmark February contract ended at MYR1,403 a metric tonne , down MYR10 from Monday, after moving between MYR1,402 and MYR1,411.

 

Rotterdam soybeans were higher and soymeal prices were mixed, and European vegoils were flat to mixed.