November 23, 2005

 

CBOT Soy Outlook on Wednesday: Steady, lower; e-CBOT, holiday trade

  

 

Soybean futures at the Chicago Board of Trade are seen starting Wednesday's session steady to lower, following e-CBOT action, with bearish underlying fundamentals keeping a lid on upside momentum in holiday trade.

 

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

 

In overnight electronic trade, January soybeans were 1 1/4 cents lower at US$5.71, December soymeal was US$0.50 lower at US$173.10 and December soyoil was 1 point lower at 21.97 cents per pound.

 

The absence of fresh news, with October crush data coming in as expected and a quiet export market is seen applying mild pressure in light volume holiday trade, analysts said.

 

However, seasonal trends showing prices head higher 77% of the time in the last 20 years heading into the Thanksgiving holiday should attract short covering interest to keep futures hovering in range bound trade. Erratic, two-sided trade associated with low volume holiday trade is seen promoting sideways action in the pre-holiday abbreviated session, traders said.

 

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

 

Market technicians said first resistance for January soybeans is seen at US$5.76-Tuesday'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 U.S. Census Bureau's crush report said 158.2 million bushels were crushed in October, in line with the average trade estimate of 158 million bushels. Soyoil stocks were seen at 1.864 billion pounds, above the average estimate of 1.758 billion pounds as well as the high end of the range. The yield on soyoil was 11.59 pounds per bushel. Soymeal stocks were 316,137 short tonnes, above the average trade estimate of 272,700 tonnes.

 

The DTN Meteorlogix weather forecast said rainfall will redevelop in southern Brazil then spread north during the next 5 days. Temperatures heat up ahead of this disturbance but should be cool down again behind it.

 

In Argentina, thunderstorms emerged overnight with more expected today, helping maintain favorable moisture conditions for crops while likely delaying field work, Meteorlogix said.

 

The Seoul-based Korea Feed Association will seek up to 110,000 metric tonnes of soymeal in a buy tender to be held at 0700 GMT Thursday, a South Korean trader said Wednesday. KFA Seoul will buy either three handy-size cargoes of Indian soymeal or two panamax-size cargoes of U.S. or South American soymeal, the trader said.

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled lower Wednesday, as the local market focused new bird flu outbreaks after an uneventful session at the Chicago Board of Trade overnight. The benchmark May 2006 soybean contract fell RMB12 to settle at RMB2,651 a metric tonne after reaching a fresh low in more than eight months at RMB2,642/tonne. Its intraday high was at RMB2,661/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Wednesday after a choppy trading day, with the benchmark contract staying well above a crucial support level. The benchmark February CPO contract ended at MYR1,414 a metric tonne, up MYR11 from Tuesday.

 

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