December 13, 2006

 

CBOT Soy Outlook Wednesday: Down 2-4 cents on overnight trend; lacks news

 

 

Soybean futures on the Chicago Board of Trade are expected to start Wednesday's day session on the defensive, in tune with the overnight trend amid follow through weakness from Tuesday and a lack of fresh news.

 

Soybean futures are called to open 2 to 4 cents lower.

 

In e-CBOT trade, January soybeans were 3 1/4 cents lower at US$6.59 3/4 and March was 4 1/4 cents lower at US$6.74 1/4 per bushel.

 

Carryover selling from Tuesday's weak technical close and a lack of fresh demand news is seen weighing on prices, particularly if speculative funds fail to support prices, analysts said.

 

The absence of any major South American weather concerns as well as weakness in Asian markets is seen aiding the lower theme, but traders anticipate choppy activity to surface as a quiet news front allows futures to settle into a consolidating holiday trading mode, a CBOT floor analyst said.

 

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. The next downside price objective is closing prices below solid support at the mid-November low of US$6.51 1/2.

 

First resistance for January soybeans is seen at Tuesday's high of US$6.69 1/2 and then at US$6.75 3/4. First support is seen at US$6.60 and then at this week's low of US$6.52 1/4.

 

The DTN Meteorlogix weather forecast said Argentina growing areas have some hot weather on tap for a 5 day period, but also some shower activity. In Brazil, the drier, hotter weather in Rio Grande do Sul will continue for another 5-6 days. After that there appears to be an increasing chance for rain. However, that this is a long range outlook and subject to significant day to day changes, Meteorlogix reports.

 

In deliveries, a total of 33 delivery notices were posted against the December soyoil future. The last trade date assigned was Dec. 8. Soymeal delivery notices totaled 703 lots. Issuers and stoppers were widely scattered. The last trade date assigned was Dec. 12.

 

In news, Taiwan's Breakfast Soybean Procurement Association, or BSPA, Wednesday rejected all bids in a tender to purchase up to 60,000 metric tonnes of U.S. or South American soybeans, an association official said.

 

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

 

Rotterdam soybeans were lower and soymeal were mostly flat. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday on long liquidation, following losses in CBOT soybean futures. The benchmark May 2007 contract settled RMB23 lower at RMB2,836 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives closed marginally lower, dragged down by bearish fundamental data released Tuesday and overnight external market weakness, analysts said. The benchmark February contract finished down MYR7 at MYR1,901 a metric tonne.