November 24, 2006

 

CBOT Soy Outlook on Friday: Seen steady; two-sided trade anticipated

 

 

Soybean futures at the Chicago Board of Trade are seen opening Friday's day session mostly steady, with bias toward two-sided trade as pressure from overnight price action finds offsetting support from weekly export sales data, analysts said.

 

Soybean futures are called to open steady.

 

In e-CBOT trade, January soybeans were 2 1/2 cents lower at US$6.71 1/2 and March was 1 3/4-cent lower at US$6.85 per bushel.

 

The market is poised for a steady start, but good weekly export sales for soybeans and soymeal may be just enough to generate a higher bias, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Otherwise, analysts anticipate two-sided post holiday activity, with volume light as traders avoid adding risk in an abbreviated trading session. CBOT day session grain markets will close at 12:00 p.m. CST Friday.

 

Light seasonal buying and the supportive influence of sharply higher palm oil futures providing strength to soyoil may generate upside momentum to soybeans also, a CBOT floor analyst added.

 

A market technician said upside momentum is still in technical command, with the next upside price objective closing January futures 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 Wednesday's high of US$6.80 1/2 and then at the contract high of US$6.82 1/2. First support is seen at US$6.70 and then at Wednesday's low of US$6.68 1/2.

 

U.S. Department of Agriculture said net weekly export sales for soybeans were 801,900 tonnes, 6% higher than the previous week and 18% above the prior the 4-week average. Trade estimates called for commitments in the 500,000 to 800,000 tonne range.

 

The biggest buyers were China, buying 253,500 tonnes and unknown destinations with 197,000 tonnes. Soymeal sales were 248,700 tonnes, 85% higher than the previous week and 77% above the prior the 4-week average. Analysts estimates called for commitments in a range of 75,000 to 150,000 tonnes. Soyoil 2006-07 sales were 300 tonnes, while the trade guess was zero to 12,000 tonnes.

 

The DTN Meteorlogix weather forecast said shower activity Thursday and during the next few days will maintain soil moisture for Argentina's summer crops. In Brazil, thunderstorms return to the southern crop belt during the next few days. Soil moisture should be surplus through Rio Grande Do Sul crop areas, and adequate elsewhere in the region, Meteorlogix added.

 

Rotterdam soybeans were and soymeal were mostly mixed. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Friday on long liquidation, analysts said. The benchmark May 2007 contract settled RMB14 lower at RMB2,902 a metric tonne.