December 13, 2005

 

CBOT Soy Outlook on Tuesday: Steady to lower; following e-CBOT

  

 

Chicago Board of Trade soybean futures are seen starting Tuesday's session with a steady to lower undertone, following the overnight theme as the market attempts to find its way following Monday's volatile price action, traders said.

 

Analysts call soybeans to open steady to 1 cent per bushel lower.

 

In overnight electronic trade, January soybeans were unchanged at US$5.84, January soymeal was US$1.20 lower at US$186.80 and January soyoil was 7 points higher at 21.09 cents per pound.

 

The absence of fresh fundamental news, talk of Monday's gains being a little overdone in the face of bearish underlying fundamentals is seen promoting choppy, range bound trade, analysts said.

 

The inability of futures to sustain Monday's early gains, with hedge related selling waiting above the market, upside potential remains limited, traders added. Outside inflationary markets are down early Tuesday, as metals markets drift lower.

 

Nevertheless, an improved technical picture is expected to provide strength to prices, with dry weather conditions in northern Argentina and rumors of China securing 1-2 cargoes of U.S. soybeans overnight serving as supportive influences on prices as well.

 

Market technicians see first resistance for January soybeans is seen at US$5.90 and then at US$5.95. First support is seen at US$5.82 - Monday's low - and then at US$5.75.

 

The DTN Meteorlogix Weather Service forecast said there is a chance for scattered showers to move into to southern crop areas of Brazil during this weekend, however there is some uncertainty in this outlook. In Argentina, chances for scattered thundershowers emerge in corn and soybean areas Friday into Saturday, while mainly dry conditions persist ahead this system.

 

A total of 168 delivery notices were redelivered against the December soyoil contract, with issuers and stoppers scattered among various firms. The last date assigned was December 12.

 

Meanwhile, Ukrainian laboratory tests Tuesday confirmed another case of bird flu, bringing the total number of affected villages on the Crimean Peninsula to 13, health officials said. Japan announced 90,000 more chickens will be culled after a bird flu outbreak at a farm in northern Japan, authorities said Tuesday.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled higher for a third consecutive trading day Tuesday, in line with Monday's rise in Chicago Board of Trade soybeans. The benchmark May 2006 soybean contract rose RMB13 to settle at RMB2,643 a metric tonne, after trading between RMB2,626 and RMB2,659/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Tuesday, with the release of a slew of supply and demand reports failing to revive trading interest in a market that has been range bound and slow lately. The benchmark February CPO futures ended at MYR1,407 a metric tonne, down MYR8 from Monday.

 

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