December 20, 2006

 

CBOT Soy Outlook on Wednesday: Up 2-3 cents; carryover buying, firm e-CBOT

 

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's session on firm footing taking its cue from higher overnight prices, with carryover buying from Tuesday an underpinning feature.

 

Soybean futures are called to open 2 to 3 cents higher.

 

In e-CBOT trade, January soybeans were 2 1/2 cents higher at US$6.56 and March was 2 1/4 cents higher at US$6.71 per bushel.

 

The market is poised for a higher start on follow through buying from Tuesday's strong technical performance, with spillover support corn futures and outside markets aiding the supportive tonnee, analysts said.

 

However, overall activity is expected to remain light heading into the holidays, with range-bound trade featured. Price moves could be exaggerated in thin trade, with traders keeping a close eye on fund related activity in the absence of any fresh fundamental news, analysts added.

 

Strength in crude oil futures is seen providing support to soyoil, with higher overnight prices in Malaysian palm oil and a fresh sale of U.S. soyoil underpinning prices, traders said.

 

U.S. Department of Agriculture said private exporters reported the sale of 25,000 metric tonnes of soyoil to unknown destinations for delivery in the 2006/2007 marketing year, the USDA said Wednesday.

 

A market technician said despite Tuesday's close near the session high the market still has some near-term technical downside momentum. The next upside price objective for January soybean futures is to close prices above solid resistance at US$6.70 a bushel. The next downside price objective is closing prices below solid support at this week's low of US$6.43.

 

First resistance for January soybeans is seen at US$6.55 and then at US$6.60. First support is seen at Tuesday's low of US$6.48 1/2 and then at US$6.43.

 

The DTN Meteorlogix weather forecast said periodic rains will maintain soil moisture for Argentine crops, but there may be some flooding with this rain. In Brazil, southern crop areas will benefit from widespread rain and thunderstorms during the next 3-5 days Meteorlogix reports.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Wednesday. Spot cash soybean bids were down 4 cents in Keokuk, Iowa, down 8 cents in Peoria, Ill., and down 2 cents at St. Louis, according to cash sources Wednesday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday, tracking similar gains in CBOT soybean's Tuesday. The benchmark May 2007 contract settled RMB11 higher at RMB2,819 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher after another uneventful trading day Wednesday, as cautious sentiment ahead of the year-end holidays continued to confine the market to narrow ranges amid thin volumes, analysts said. The March contract ended up MYR13 at MYR1,868 a metric tonne.