November 30, 2005

 

CBOT Soy Outlook on Wednesday: Up 2-3 cents, taking its cue from e-CBOT

  

 

Chicago Board of Trade soybean futures are seen starting Wednesday's open auction session firmer, taking its cue from e-CBOT action, as the market consolidates in a range, traders said.

 

Analysts call soybeans to open 2 to 3 cents per bushel higher.

 

In overnight electronic trade, January soybeans were 3 cents higher at US$5.57, January soymeal was US$1.10 higher at US$171.90 and January soyoil was 3 points higher at 21.20 cents per pound.

 

A firm cash basis, higher overseas markets overnight and signs that downside selling pressure was showing signs of exhaustion are seen providing modest support to prices, analysts said.

 

End of the month commercial buying, rumors of China looking to book a few cargoes of soybeans and drier conditions over the next few days in Brazil may add strength to prices as well, traders added.

 

Nevertheless, fresh supportive fundamental news remains scarce, with analysts saying the market will either need a healthy dose of export demand or weather related problems for South American crops to spark any meaningful upside momentum.

 

Market technicians said first resistance for January soybeans is seen at US$5.59-this week's high--and then at US$5.65. First support is seen at US$5.50 and then at US$5.45 1/2--this week's low.

 

The DTN Meteorlogix Weather Service said episodes of scattered showers and thundershowers are expected across Brazilian growing areas during the next 5-7 days. In Argentina, recent rain activity maintains favorable conditions for crops, except in the far southwest where it may be a little too dry, Meteorlogix added.

 

Meanwhile, a total of 1,978 delivery notices were posted against the December soyoil contract, with the house account at ADM Investor Services issuing all 1,978 lots, stoppers were scattered among various firms. The delivery receipts were for inventories located in Ackley, Iowa. The last date assigned was November 28.

 

In news, Indonesian tests have confirmed that a 25-year-woman who died overnight in a Jakarta hospital had the bird flu virus, a hospital official said Wednesday.

 

China's health minister said Wednesday, China is being open about its bird flu outbreaks, not covering them up, but there are fears that incompetent officials in poor, rural areas may not detect cases as quickly as they should.

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled mostly higher Wednesday as bargain hunting emerged following five straight trading days of declines on worries over bird flu. The benchmark May 2006 soybean contract rose RMB19 to settle at RMB2,543 a metric tonne, after trading between RMB2,512 and RMB2,578/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Wednesday, with the benchmark contract touching a fresh 2 1/2 month low amid lingering concerns about slow consumer demand and rising inventories. The benchmark February CPO contract ended at MYR1,390 a metric tonne, down MYR6 from Tuesday.

 

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