December 27, 2005

 

CBOT Soy Outlook on Tuesday: Down 3-5 cents; following e-CBOT theme

  

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's session on weak footing, following the overnight theme, consolidating after strong price gains in recent weeks.

 

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

 

In overnight electronic trade, March soybeans were 6 1/4 cents lower at US$6.18 3/4, March soymeal was US$1.90 lower at US$201.50 and March soyoil was 18 points higher at 21.79 cents per pound.

 

The market looks a little toppy on technical charts and with the overnight stumble, participants maybe looking to a take a few profits off the table as the year draws to an end, said Jack Scoville, analyst with the Price Group in Chicago.

 

Reports of beneficial rains in southern Brazil during the extended holiday weekend was seen adding to the lower tone, but with dryness still a concern in Argentina declines are seen limited.

 

A quiet news front is not seen providing any definitive direction to prices in subdued holiday trade, but floor sources said downside momentum should be limited as traders remain cautious about pressing short positions amid expectations for fresh speculative index fund buying to surface early in 2006.

 

Market technicians said prices Friday posted an inside day session and ended little changed, indicating a pause in the bullish action

 

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.

 

DTN Meteorlogix Weather Service said no widespread thundershower activity is expected this week in soybean growing areas of Argentina. Meanwhile, rain is needed to help ease concerns for developing soybeans, especially as temperatures trend warmer.

 

In Brazil, thunderstorms back on Friday and Saturday will ease any concerns for developing crops. More rain is expected later this week or this weekend, as no significant concerns are present at this time, Meteorlogix added.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net long futures and options positions totaling 11,883 lots in soybeans, 13,966 contracts in soymeal while holding a net short position of 28,183 lots in soymeal as of Dec. 20.

 

On tap for Tuesday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

In other news, China's soybean imports rose 1.6% on year in November to 2.55 million metric tonnes, according to the General Administration of Customs Monday. Imports from the U.S. in November were reported at 814, 079 metric tonnes, down 51.1% from November 2004. In the January-November period, soybean imports rose 32.9% on year to 23.98 million tonnes.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled higher Tuesday, but most contracts gave up some gains in the last hour of trading because trading volume fell after long liquidation earlier in the day. The benchmark May 2006 soybean contract settled RMB7 higher at RMB2,760 a metric tonne, after trading between RMB2,720/tonne and RMB2,784/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended little changed Tuesday after a lackluster and directionless trading day. The benchmark March CPO contract ended at MYR1,415 a metric tonne, unchanged from Friday.