December 1, 2006

 

CBOT Soy Outlook on Friday: Seen down 3-5 cents; e-CBOT, quiet news front

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session on the defensive, taking their lead from lower overnight indicators amid a lack of fresh news.

 

Soybean futures are called to open 3 to 5 cents lower.

 

In e-CBOT trade, January soybeans were 4 cents lower at US$6.81 1/2 and March was 5 3/4 cents lower at US$6.94 1/2 per bushel.

 

The overnight trend will set the stage for the day session opening, with weakness in outside markets encouraging some end-of-week position evening, a CBOT floor analyst said.

 

Declines in Asian markets will aid the early weak tone, but with good price support seen beneath the market the downside pressure may be limited and choppy two-sided activity may emerge, analysts added.

 

Otherwise, traders are expected to keep a close eye on movements in corn as well as soyoil for near-term direction as futures continue to await fresh news to provide a definitive influence on prices, a CBOT broker adds.

 

A market technician said bullish momentum is still in full technical command. The next upside price objective is to close January futures above major psychological resistance at US$7.00 a bushel. The next downside price objective is closing prices below solid support at US$6.70.

 

First resistance for January soybeans is seen at Thursday's high of US$6.89 and then at the contract high of US$6.93. First support is seen at US$6.80 and then at this week's low of US$6.76.

 

The DTN Meteorlogix Weather forecast said South America's major crop areas continue to have a mostly beneficial weather pattern. Southern Brazil will have thundershowers Sunday into Monday, with up to one inch of rain. Northern Brazil soybean areas had rainfall of up to one inch in Mato Grosso Thursday. Showers are moving into Mato Grosso do Sul Friday. Most areas of northern Brazil should have at least moderate rainfall in the next five days.

 

In Argentina, thundershowers Friday and Saturday will bring up to one inch of rain. These periodic showers are favorable for soybean development, Meteorlogix said.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Friday. Spot cash soybean bids were down 4 cents in Peoria, Ill., and up 1 cent at Evansville, Ind., according to cash sources Friday.

 

In deliveries, a total of 3,457 delivery notices were posted against the December soyoil futures. The house account at Bunge Chicago issued 777 lots and the house account at Term Commodities stopped 776 lots. The last trade date assigned was Nov. 30. Soymeal delivery notices totaled 1,108 lots. Issuers and stoppers were widely scattered with a customer account at RJ O'Brien the principle stopper of 422 lots. The last trade date assigned was Nov. 29.

 

India has retained the base import prices of palm oil and crude soybean oil at existing levels, a finance ministry notification said Friday. The base import price of crude palm oil is currently at US$447 a metric tonne and that of crude soyoil is at US$580/tonne.

 

Rotterdam soybeans were mostly flat and soymeal was mixed. European vegoils were flat to mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled down Friday, pressured by losses in soybean prices on the spot market, analysts said. The benchmark May 2007 contract settled RMB20 lower at RMB2,891 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Friday as a slew of bearish factors, including a stronger ringgit and weak technical indicators, combined to snap a two-week rally. The benchmark February contract ended at MYR1,888 a metric tonne, down MYR52 from Thursday.