December 8, 2006

 

CBOT Soy Outlook on Friday: Down 1-2 cents on overnight, quiet news front

 

 

Chicago Board of Trade soybean futures are expected to open Friday's day session with modest declines, taking their cue from overnight losses.

 

Soybean futures are called to open 1 to 2 cents lower.

 

In e-CBOT trade, January soybeans were 1 1/4-cent lower at US$6.60 3/4 and March was 2 cents lower at US$6.74 1/4 per bushel.

 

The absence of any inspiring positive news has futures poised to drift lower, with pre-weekend positioning a feature, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Soft technicals and outlooks for the Monday's crop report to lack any bullish developments is helping promote a defensive theme, Roose added.

 

A lack of threatening weather for South American crops as well as talk of the U.S. Department of Agriculture possibly raising Brazil and Argentina crop projections should add to the lower tone, traders added.

 

However, two-sided trade is a possibility, with a quiet news front expected to keep traders following order flow in a thinly traded market heading toward year end holidays, analysts said.

 

Meanwhile, Roose says the Goldman roll will continue Friday and may have a negative effect on spreads.

 

A market technician said the next upside price objective for January soybeans is to close prices above solid resistance at US$6.75 3/4 a bushel, which is the top of a downside price gap on the daily bar chart that was created Monday. The next downside price objective is closing prices below solid support at the mid-November "reaction low" of US$6.51 1/2.

 

First resistance for January soybeans is seen at Thursday's high of US$6.63 and then at this week's high of US$6.67. First support is seen at US$6.60 and then at Thursday's low of US$6.54 1/2.

 

The DTN Meteorlogix weather forecast calls for a drier trend during the next five days in Argentina, but soil moisture should favor early development of summer crops. In Brazil, the Rio Grande do Sul area continues to look drier and warmer during the next 5-7 days. Topsoils are slowly drying out, but mainly favorable conditions are on tap from Parana northward due to continued rain chances in these areas, Meteorlogix reports.

 

In deliveries, a total of 556 delivery notices were posted against the December soyoil future. Issuers and stoppers ere widely scattered among various commission houses, with the house account at Term Commodities stopping of 195 lots. The last trade date assigned was Dec. 7. Soymeal delivery notices totaled 981 lots. Issuers and stoppers were widely scattered. The last trade date assigned was Dec. 7.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Friday. Spot cash soybean bids were down 3 cents in Sioux City, IA, down 3 cents in Peoria, Ill., and down 3 cents at St. Louis, according to cash sources Friday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, supported by Thursday's gains in CBOT soybean futures, analysts said. The benchmark May 2007 contract settled up RMB12 at RMB2,825 a metric tonne, after trading between RMB2,816/tonne and RMB2,833/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher Friday amid bullish price forecasts from prominent analysts. The benchmark February contract ended up MYR15 at MYR1,865 a metric tonne.