December 1, 2005

 

CBOT Soy Outlook on Thursday: Down 2-3 cents; lacks supportive inputs

  

 

Chicago Board of Trade soybean futures are seen starting Thursday's session on weak footing, extending the overnight theme as the lack of supportive inputs weigh on prices, traders said

 

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

 

In overnight electronic trade, January soybeans were 2 cents lower at USUS$5.56, January soymeal was USUS$0.50 lower at USUS$171.60 and January soyoil was 1 point higher at 21.30 cents per pound.

 

The combination of lower than expected weekly export sales, bird flu issues in China and favorable South American crop conditions are seen keeping bearish momentum flowing in the market, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Traders anticipate prices will once again settle into the markets recent trading range, with the reestablishment of positions on the first day of the month and a lack of support to challenge overhead resistance limiting upside potential.

 

Market technicians said first resistance for January soybeans is seen at USUS$5.61 1/2 - Wednesday's high - and then at USUS$5.65. First support is seen at USUS$5.52 1/2 - Wednesday's low - and then at USUS$5.50.

 

Lackluster export sales remain a hindrance to price strength, as the market must find a price level that will spur export consumption, said a CBOT commission house broker

 

The USDA said Thursday that 2005-06 marketing year sales totaled 370,800 tonnes. The primary buyer was China at 292,800 tonnes. Pre-report estimates ranged from 400,000 to 600,000 tonnes.

 

Soymeal sales were 76,400 tonnes, a figure below estimates that ranged from 125,000 to 175,000 tonnes. Net sales of 3,400 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 4,000 to 9,000 tonnes.

 

The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association, or BSPA, concluded a tender late Wednesday to buy 60,000 metric tonnes of U.S.-origin soybeans from trading house Agrex, a Taipei trader said Thursday.

 

The U.S. Census Bureau released its revised soyoil stocks figure for October, pegging stocks at 1.887 billion pounds. Soyoil stocks were estimated at 1.864 billion in last week's Census crush report.

 

The DTN Meteorlogix Weather Service said episodes of scattered showers and thundershowers are on tap for Brazilian growing areas during the next 5-7 days. In Argentina no significant rainfall is seen during the next 5-7 days.

 

Meanwhile, a total of 1,574 delivery notices were redelivered against the December soyoil contract, with a customer account at Fimat the primary stopper at 776 lots. The last date assigned was Nov. 30.

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled mostly lower in subdued trading Thursday, giving up some of Wednesday's gains. Limited follow-through buying was overwhelmed by fresh short selling, traders said. The benchmark May 2006 soybean contract lost RMB7 to settle at RMB2,536 a metric tonne, after trading between RMB2,528/tonne and RMB2,552/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Thursday as the market remained under pressure from lingering concerns about rising stocks amid slowing demand. The benchmark February CPO contract ended at MYR1,387 a metric tonne, down MYR4 from Wednesday.

 

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