December 12, 2006

 

CBOT Soy Outlook on Tuesday: Up 1-2 cents on e-CBOT, Monday carryover

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session modestly higher, continuing the overnight theme on carryover momentum from Monday's firm technical close.

 

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

 

In e-CBOT trade, January soybeans were 2 1/4 cents higher at US$6.69 and March was 1-cent higher at US$6.83 3/4 per bushel.

 

A solid technical close in Monday's session coupled with signs of demand strengthening following recent price declines are expected to lend support to futures in early action, analysts said.

 

Firm Asian markets overnight and ideas soybeans will continue to mimic upside price moves in corn are seen aiding the higher tone, a CBOT floor analyst said. However, following Monday's strong gains and a relatively quiet news front, two-sided trade could quickly emerge on any signs of upside exhaustion, he added.

 

A technical analyst said price action Monday scored a bullish "outside day" up on the daily bar chart. 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. 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 Monday's high of US$6.69 and then at US$6.75 3/4. First support is seen at US$6.60 and then at Monday's low of US$6.52 1/4.

 

The DTN Meteorlogix weather forecast said some hot weather is on tap for Argentina in a five-day period, but some shower activity is expected as well. In Brazil, drier and hotter weather conditions are seen for Rio Grande do Sul for another 6-7 days. After that there appears to be an increasing chance for rain, however, this is a long range outlook and subject to significant day to day changes, Meteorlogix reports.

 

In deliveries, a total of 325 delivery notices were posted against the December soyoil future. Issuers and stoppers were widely scattered among various commission houses, with the house account at Term Commodities issuing of 170 lots. The last trade date assigned was Dec. 8. Soymeal delivery notices totaled 859 lots. Issuers and stoppers were widely scattered, with the house account at ADM Investor Services stopping 186 lots. The last trade date assigned was Dec. 11.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Tuesday. Spot cash soybean bids were down 2 cents in Keokuk, Iowa, down 4 cents in Peoria, Ill., and down 4 cents at St. Louis, according to cash sources Tuesday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, following Monday's gains in CBOT soybean futures. The benchmark May 2007 contract rose RMB26 to settle at RMB2,859 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher for a third straight day Tuesday, unaffected by a slew of bearish factors, including a buildup in inventories and falling exports. The benchmark February contract ended up MYR14 at MYR1,908 a metric tonne.