December 22, 2006

 

CBOT Soy Outlook on Friday: Up 2-4 cents; firm overnight, quiet news front

 

 

Soybean futures at the Chicago Board of Trade are set to start Friday's day session higher, as firm overnight prices are providing a supportive theme in the absence of fresh fundamental news.

 

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

 

In e-CBOT trade, January soybeans were 3 cents higher at US$6.53 1/4 and March was 2 1/2 cents higher at US$6.68 1/4 per bushel.

 

Technical momentum is seen promoting early price strength, with follow through buying from overnight trade seen as the key directive for prices, analysts said. Higher prices in outside markets are seen aiding the supportive tonnee, but technicals will be the key driver of prices in pre-holiday type trade, analysts added.

 

Nevertheless, futures are expected to remain in a narrow range, hovering near their 50-day moving averages, as bearish weather conditions in South America cap upside movement while smaller acreage outlooks and biodiesel demand underpin prices, traders said.

 

A market technician said the next upside price objective for January soybeans 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 Thursday's high of US$6.55 1/2 and then at US$6.60. First support is seen at Thursday's low of US$6.50 and then at US$6.46 3/4.

 

The DTN Meteorlogix weather forecast said Argentine crop areas may turn drier and hotter next week; however, this wouldn't be a problem unless it continues for an extended period of time. Current conditions favor early growth of crops, Meteorlogix said. Southern crop areas in Brazil will benefit from widespread rain and thunderstorms during the next 3-5 days, Meteorlogix forecasts.

 

CBOT grain and soycomplex futures close at 12:00 CST Friday and will be closed Monday in observance of the Christmas holiday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, following CBOT gains Thursday, analysts said. The May 2007 contract settled RMB8 higher at RMB2,840 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher Friday as short covering and concerns about supply disruptions due to ongoing floods in parts of the country kept the market in positive territory, analysts said. The March contract ended MYR19 higher at MYR1,901 a metric tonne.