December 5, 2005

 

CBOT Soy Outlook on Monday: Flat-Up 2 cents, e-CBOT, higher outside markets

  

 

Soybean futures on the Chicago Board of Trade are seen opening Monday's session steady to firmer, based on overnight action, with higher inflationary markets providing mild support.

 

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

 

In overnight electronic trade, January soybeans were 3/4 cent higher at US$5.63 1/2, January soymeal was US$1.40 lower at US$172.30 and January soyoil was 15 points higher at 21.71 cents per pound.

 

A continuation of speculative short covering in a bear market is expected to keep the market's bounce from recent lows intact, with higher energy and metal markets generating support in subdued volume, analysts said.

 

Firm cash basis levels, with tight farmer holding of supplies and talk of increased soymeal feedings due to freezing temperatures across the central U.S. and rumors of Chinese buying are expected to add strength to prices as well.

 

However, two-sided trade is seen as a possibility, with a slower-than-expected export pace, favorable South American crop conditions, and an overall bearish fundamental outlook limiting upside potential, traders added.

 

Technical analysts said Friday's close near the session high and at the weekly high close, gives market bulls a bit of fresh upside technical momentum heading into the new trading week. First resistance for January soybeans is seen at US$5.64 1/2 - Friday's high - and then at US$5.70. First support is seen at US$5.58 - Friday's low - and then at US$5.54.

 

The DTN Meteorlogix Weather Service said scattered rains will develop in the south and spread north across Brazil during the next 24-48 hours. In Argentina, weekend rainfall will maintain favorable growing conditions for crops this week, despite a drier outlook.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

Meanwhile, a total of 718 delivery notices were redelivered against the December soyoil contract, with issuers and stoppers scattered among various firms. The last date assigned was Dec. 2.

 

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 30,661 lots in soybeans, 18,291 contracts in soyoil and 12,770 lots in soymeal as of Nov. 29.

 

Taiwan's Major Feedmeal Group concluded a tender Dec. 1 to buy a total of 50,000 metric tonnes of Indian soymeal, a Seoul-based trader said Monday.

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled slightly lower in subdued trading Monday, with some analysts expecting a slight rebound in the coming days if there are no reports of new bird flu outbreaks. The benchmark May 2006 soybean contract fell RMB4 to settle at RMB2,542 a metric tonne, after trading between RMB2,530 and RMB2,553/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Monday as trading was range bound due to a lack of leads. The benchmark February CPO contract breached psychological resistance at MYR1,400, and ended at MYR1,402 a metric tonne, up MYR5 from Friday.

 

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