November 28, 2006

 

CBOT Soy Outlook on Tuesday: Down 1-2 cents; taking cue from overnight trade

 

 

Soybean futures at the Chicago Board of Trade are seen starting Tuesday's day session modestly lower, taking its cue from overnight action as the market eases back on a lack fresh news.

 

Soybean futures are called to open 1 to 2 cents lower.

 

In e-CBOT trade, January soybeans were 1 cent lower at US$6.87 and March was 2 cents lower at US$7.00 per bushel.

 

The market is set to start a little easier, with Monday's upward move looking a little tired, opening the door for light pressure to weigh on prices, said Don Roose, president U.S. Commodities in West Des Moines Iowa.

 

A quiet news front is providing little direction, but with a lower tonnee in Asian markets and talk of upward momentum being stagnant near Monday's highs a modest setback may be in order, traders added.

 

The market is in need of a resurgence of fresh positive news to keep speculative buyers enthused, as the old news aiding the upward tonnee is pretty well digested, Roose added.

 

A market technician said the next upside price objective for January soybeans is to close prices above major psychological resistance at US$7.00 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 Monday's contract high of US$6.93 and then at US$7.00. First support is seen at Monday's low of US$6.84 3/4 and then at US$6.80.

 

The DTN Meteorlogix Weather Service forecast said thunderstorms moving through Brazil will maintain soil moisture for soybeans in most areas, but especially from Mato Grosso Do Sul southward. In Argentina, recent thunderstorm activity will maintain soil moisture for soybeans, Meteorlogix reports.

 

Commodity Futures Trading Commission on Monday reported large speculative traders were net long 37,577 combined soybean futures and options contracts as of Nov. 21, compared with net longs of 45,291 in the previous week. Speculative funds were reported net long soyoil futures and options to the tune of 70,377 lots, compared with net longs of 64,431 lots in the prior week. Large speculative traders were reported net long combined futures and options positions in soymeal by 33,136 lots, compared with net longs of 32,866 contracts last week.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Tuesday. Spot cash soybean bids were down 4 cents in Des Moines, IA, down 1-cent in Peoria, Ill., and up 4 cents in St. Louis, according to cash sources Tuesday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday on a downward correction, analysts said. The benchmark May 2007 contract settled RMB17 lower at RMB2,947 a metric tonne, after trading between RMB2,937/tonne and RMB2,960/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Tuesday as the market succumbed to profit-taking a day after hitting a 31-month high. The benchmark February CPO contract ended at MYR1,898 a metric tonne, down MYR23 from Monday.