December 21, 2005

 

CBOT Soy Outlook on Wednesday: Down 3-5 cent; following e-CBOT theme

  

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's open auction session lower, in tune with the e-CBOT theme amid follow through selling from Tuesday's weak technical close.

 

Analysts call soybeans to open 3 to 5 cents per bushel lower.

 

In overnight electronic trade, March soybeans were 3 3/4 cents lower at US$6.12 3/4, March soymeal was US$2.40 lower at US$196.20 and March soyoil was 4 points lower at 21.50 cents per pound.

 

The absence of support from outside inflationary markets, generally favorable crop conditions in South America coupled with overall bearish fundamentals are expected to spur corrective price action, analysts said.

 

A quiet news front is expected to keep focus on technical factors, with the evening of positions heading toward the Christmas holiday weekend and the rolling of January positions ahead of next week's first notice day seen as featured attractions.

 

Technical analysts said Tuesday's close near the session low after hitting another fresh three-month high could indicate a near-term top being in place as buyers became exhausted at Tuesday's highs.

 

First resistance for March soybeans is seen at US$6.27 1/2 - Tuesday's high - and then at US$6.30. First support is seen at US$6.10 and then at US$6.05 - this week's low.

 

Meanwhile, generally favorable conditions for planting and developing soybeans through the major growing areas of Argentina, DTN Meteorlogix said. There is a chance for a few scattered thunderstorms Thursday into Friday, otherwise dry conditions will be evident during a seven-day period.

 

In Brazil, no significant upper level ridging appears on weather maps. However, the only widespread rain event is forecasted out at day 10, Meteorlogix said.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled lower Wednesday after Chicago Board of Trade soybean futures fell Tuesday. The benchmark May 2006 soybean contract settled RMB28 lower at RMB2,720 a metric tonne after trading between RMB2,694/tonne and RMB2,747/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended a tad lower Wednesday as the range-bound, lackluster trading of past days persisted. Traders said a lack of fresh supply and demand data and typically cautious sentiment ahead of year-end holidays combined to sap trading interest. The benchmark March CPO contract ended at MYR1,406 a metric tonne, down MYR3 from Tuesday, after moving within a very narrow range of MYR1,402 to MYR1,410.

 

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