December 23, 2005

 

CBOT Soy Outlook on Friday: Flat-down 2 cents; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's session slightly weaker, in tune with overnight action, as wetter weather conditions in South America overhangs the market, traders said. Analysts call soybeans to open flat to 2 cents per bushel lower.

 

In overnight electronic trade, March soybeans were 1 1/2 cent lower at US$6.23 3/4, March soymeal was US$0.90 lower at US$202.70 and March soyoil was 14 points higher at 21.90 cents per pound.

 

Unexpected rain showers overnight in South America are expected to apply mild pressure to prices in early action, analysts said. DTN Meteorlogix Weather Service said scattered thunderstorms are expected Friday into Saturday in Brazil. These look heavier than they looked Thursday at this time. After this system moves by there should be another week or more before there is another chance, Meteorlogix said.

 

Scattered to widely scattered showers and thundershowers occurred in Argentina during the past 24 hours. Amounts varied from 0.10-0.25 inch with heavier amounts reported locally. Temperatures ranged from 88-97 Fahrenheit. Dry conditions are expected to return Sunday through Tuesday, with temperatures near to below normal Sunday, and near to above normal Monday and Tuesday, Meteorlogix added.

 

However, the absence of any other fresh fundamental news is seen keeping pre-holiday weekend positioning in play, with the potential for volatile two-sided action if technical factors come into play in thin trade.

 

Market technicians said market bulls have technical momentum on their side and gained more Thursday, with the next upside price objective for March futures resistance at the US$6.50 level. First resistance for March soybeans is seen at US$6.29--Thursday's high--and then at US$6.38. First support is seen at US$6.20 1/2--Thursday's low--and then at US$6.10.

 

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

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled mixed Friday as trading activities slowed. The benchmark May 2006 soybean contract settled at RMB2,755 a tonne, almost unchanged from yesterday, after trading between RMB2,749/tonne and RMB2,764/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Friday on short-covering ahead of a long weekend. The benchmark March CPO contract closed at MYR1,415 a metric tonne, up MYR4 from Thursday. Rotterdam soybeans and soymeal prices were higher, European vegoils were mixed.