December 30, 2005

 

CBOT Soy Outlook on Friday: Down 1-2 cents, taking cue from e-CBOT

  

 

Soybean futures at the Chicago Board of Trade are seen starting Friday's session weaker, taking its cue from overnight action amid the absence of fresh directive news. Analysts call soybeans to open 1 to 2 cents per bushel lower.

 

In overnight electronic trade, March soybeans were 1 1/2 cent lower at US$6.07 1/4, March soymeal was US$1.70 lower at US$196.10 and March soyoil was 14 points higher at 21.30 cents per pound.

 

A quiet news front is seen keeping traders focused on end of the year positioning, with concerns over weather conditions in South America an underlying feature, analysts said.

 

Follow through selling from Thursday's late tumble is seen projecting a defensive theme in the market, but traders said the declines were more a factor of a lack of buyers than any out right liquidation phase. Fund related activity will be watched closely as the market closes out 2005 in a shortened trading session.

 

CBOT grain and oilseed markets close at noon CST Friday and will be closed Monday in observance of the New Years Day holiday.

 

Market technicians said Thursday's close under US$6.19 has opened the door for additional downside correction short-term. Daily momentum signals are showing signs of weakening from overbought levels, which could put additional pressure on the market in the days ahead.

 

DTN Meteorlogix Weather Service episodes of scattered showers and thunderstorms will cover most of Brazil's soybean growing regions before the weekend is out. However, in Argentina no widespread thundershower activity is expected during the next seven days, except possibly in the southern wheat belt and in the western crop areas. Hot temperatures will be common at times during the period with readings frequently reaching into the 90s Fahrenheit.

 

U.S. Department of Agriculture said Friday that 2005-06 marketing year sales totaled 890,200 tonnes. The primary buyer was China at 477,000 tonnes. Pre-report estimates ranged from 550,000 to 750,000 tonnes.

 

Soymeal sales were 81,800 tonnes, a figure within the range from 25,000 to 125,000 tonnes. Net sales of 7,500 tonnes were reported for soyoil. Trade guesses called for commitments in a range of zero to 10,000 tonnes.

 

Meanwhile, a total of 930 delivery notices were posted against the January soybean contract. The primary issuers were customer accounts at RJ O'Brien and ABN Amro with 505 and 350 lots respectfully. The principle stoppers were customer accounts at FC Stone and ADM Investor Services at 366 and 241 lots respectfully. The last date assigned was Nov. 25.

 

A total of 1,529 delivery notices were posted against January soyoil. Customer accounts at RJ O'Brien and Iowa Grain were the primary issuers at 942 and 467 lots respectfully. A customer account at Iowa Grain was the principle stopper at 392 lots. The last date assigned was Dec. 19.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled lower Friday on Thursday's CBOT losses. The benchmark May 2006 soybean contract settled RMB34 lower at RMB2,686 a metric tonne after trading between RMB2,677 and RMB2,693/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Friday after a choppy trading day that featured a very brisk morning session followed by a slow afternoon. Traders said with a long weekend ahead, most participants closed out their positions in the early hours and withdrew to the sidelines for the rest of the day. The benchmark March CPO contact ended at MYR1,415 a metric tonne, unchanged from Thursday.

 

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