November 29, 2005

 

CBOT Soy Outlook on Tuesday: Down 3-5 cents; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's session moderately lower, following the overnight theme, as the market gives back Monday's late short covering gains.

 

Analysts call soybeans to open 3 to 5 cents per bushel lower.

 

In overnight electronic trade, January soybeans were 4 cents lower at US$5.54 1/4, January soymeal was US$1.70 lower at US$170.00 and January soyoil was 16 points lower at 21.30 cents per pound.

 

A quiet news front, with improving crop conditions in South America, lingering bird flu concerns and the absence of aggressive export volumes in the market should keep a lid on upside potential, said a CBOT commission house broker.

 

However, two-sided trade is a possibility as traders look for signs of speculative buying interest following Monday's reversal from 9-month lows. Nevertheless, without fresh supportive inputs to underpin advances, analysts say it will be tough to sustain upside momentum.

 

Market technicians said first resistance for January soybeans is seen at US$5.65 and then at US$5.70. First support is seen at US$5.50 and then at US$5.45 1/2--Monday's low.

 

The DTN Meteorlogix Weather Service said no significant concerns are seen for Brazil at this time, while recent rain activity in Argentina maintains favorable conditions for crops, except in the far southwest where it may be a little too dry.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net short futures and options positions totaling 14,552 lots in soybeans 9,002 contracts in soyoil and 7,327 lots in soymeal as of Nov. 22.

 

State-owned Taiwan Sugar Corp. has concluded a buy tender Tuesday for 12,000 tonnes of U.S. No. 2 yellow soybeans, a trader in Taipei said. The soybeans were purchased from trading house Agrex, with shipment scheduled either between Dec. 23 and Jan. 6 from the U.S. Gulf, or between Jan. 7 and Jan. 21 from the Pacific Northwest.

 

The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association will seek 40,000-60,000 metric tonnes of U.S. soybeans in a tender Wednesday, said a Taipei-based trader Tuesday.

 

In news, China has discovered two new bird flu outbreaks among poultry in the northwestern Xinjiang region and the central province of Hunan, the Agriculture Ministry said Tuesday.

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled mostly lower Tuesday, extending a downtrend for the past four trading days on worries over bird flu. The benchmark May 2006 soybean contract fell RMB13 to settle at RMB2,524 a metric tonne, after trading between RMB2,509 and RMB2,550/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended a tad lower Tuesday amid lingering bearish sentiment, with the benchmark contract settling below a major psychological level for a second straight day. The benchmark February contract ended at MYR1,395 a metric tonne, down MYR4 from Monday.

 

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