December 15, 2005

 

CBOT Soy Outlook on Thurday: Down 1-3 cents; lacks supportive inputs

  

 

Soybean futures at the Chicago Board of Trade are expected to start Thursday's open auction session lower, following the overnight theme amid the absence of fresh supportive inputs, traders said.

 

Analysts call soybeans to open 1 to 3 cent per bushel lower.

 

Weakness in overseas markets overnight, lackluster weekly export sales and declines in inflationary markets are seen weighing on prices to start the day, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

In overnight electronic trade, January soybeans were 1 1/2 cents lower at US$5.91, January soymeal was unchanged at US$191.00 and January soyoil was 9 points lower at 21.21 cents per pound.

 

The market is expected to continue its consolidation of recent gains, with the potential for sideways and choppy trading conditions until supportive fundamentals surface to justify holding prices at higher levels, traders added.

 

Speculative fund activity remains the wild card in the market, with traders acknowledging that in thin markets, fund activity can easily push or pull prices in either direction. Meanwhile, technical chart patterns remain positive, but overbought conditions exist, Roose added.

 

Technical analysts said a close above this week's high of US$6.02 would provide market bulls with solid upside technical power. First resistance for January soybeans is seen at US$6.02 and then at US$6.11--the October high. First support is seen at US$5.88--Wednesday's low--and then at US$5.82--this week's low.

 

U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 504,100 tonnes. The primary buyer was unknown destinations at 157,000 tonnes. Pre-report estimates ranged from 500,000 to 700,000 tonnes.

 

Soymeal sales were 120,900 tonnes, a figure within the range from 100,000 to 150,000 tonnes. Net sales of 300 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 4,000 to 9,000 tonnes.

 

The DTN Meteorlogix Weather Service forecast said there is a chance for showers in southern Brazil this weekend but the best chance appears to be during the 6-10 day period. In Argentina, there will be a few showers and isolated thundershowers in the region through the weekend, with the best chance for significant rain next Thursday.

 

The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association bought 57,000 metric tonnes of U.S. No. 2 soybeans from trading house Marubeni in a buy tender Thursday, said a Taipei-based trader.

 

In deliveries, a total of 23 delivery notices were posted against the December soymeal contract, with the house account at Bunge Chicago stopping the lots. The last date assigned was December 13. A total of 3 delivery receipts were redelivered against the December soyoil contract. The last date assigned was December 14.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled mostly lower Thursday, reversing a consecutive rise in the past four trading days after Chicago Board of Trade soybeans fell Wednesday. The local benchmark May 2006 soybean contract settled RMB16 lower at RMB2,662 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally lower Thursday, with the market dragged down initially by uninspiring export estimates before making a late recovery amid speculative buying interest. The benchmark February contract ended at MYR1,395 a metric tonne, down MYR2 from Wednesday.

 

Rotterdam soybeans were mostly higher and soymeal prices were mostly lower, European vegoils were flat to higher.