December 16, 2005

CBOT Soy Outlook on Friday: Seen up 4-6 cents on e-CBOT, weather

Soy complex futures at the Chicago Board of Trade on Friday are called to open firmer, supported by overnight trade and long-range forecasts calling for dryness in South America.

Most-active January soybeans are called to open 4 to 6 cents higher.

In overnight, e-cbot trade, January soybean rose 8 1/2 cents to US$5.95 3/4 a bushel.

Generally favorable conditions for planting and developing soybeans through the major growing areas of Brazil, DTN Meteorlogix said, although drier weather bears watching across southern areas of Parana and Rio Grande do Sul.

Some showers and thunderstorms are forecast for the soybean-growing regions of Argentina, but then dry conditions resume on Saturday. Sunday could also bring scattered showers, with dry weather early next week, the weather firm said.

"It's the six to 10 day forecast that's drier and it was a slightly different tweak," than previous forecasts, said Don Roose, president, U.S. Commodities. "With a market susceptible to fund buying," the bias is to the upside.

The strength in overnight trade is a bit puzzling, but analysts point to strength in domestic Chinese soybean prices as bird flu fears ease. Soybean futures on China's Dalian Commodity Exchange also rose Friday on fresh speculative buying. May gained RMB16 to RMB2,678 a metric tonne. With little fresh news around, trade could be quiet, analysts said.

Crude palm oil futures on the Bursa Malaysia Derivatives were little changed Friday after a lackluster day. Lingering concerns over weak exports and high stocks remain an issue, traders there said. March ended at MYR1,401 a metric tonne, up MYR1.

Rotterdam soybean and soymeal prices were weaker overnight. European vegoils were firmer.