March 22, 2006

 

CBOT Soy Outlook on Wednesday: Up 2-4 cents on South American crop, technicals

 

Soybean futures at the Chicago Board of Trade were called to open up 2-4 cents Wednesday on a lingering technical bounce after Monday's 3-1/2 month low and on lowered estimates for South America's key 2005-06 soybean crop, brokers said.

 

They noted talk that Oil World, a German analytic firm, had forecast Brazil's 2005-06 soybean crop at 54 million to 56 million metric tonnes and Argentina's crop at 39 million tonnes. The estimates together are 5 million tonnes less than the latest U.S. Department of Agriculture's Brazil and Argentine 2005-06 soybean production estimates.

 

In overnight screen trade, the e-cbot May soybean contract settled up 3 cents at $5.78 1/4 a bushel. May soymeal ended up 90 cents a short tonne at $175.00, and May soyoil closed up 0.07 cent at 22.90 cents a pound.

 

Prices for CBOT May soybeans on Tuesday closed near the session high after hitting on Monday a fresh 3 1/2-month low, a technical source noted

 

"Bears are still in technical control," he said of CBOT May soybeans. "Their next downside price objective is a challenge of support at the January low of $5.72 1/2, or below. It will take a close above resistance at $5.95 to provide the bulls with fresh upside technical momentum."

 

First resistance for CBOT May soybeans was seen at $5.78 and then at $5.82 - this week's high. First support was seen at $5.71 1/4 - this week's low - and then at $5.70, the technical source said.

 

U.S. Midwest cash soybean basis bids were mixed Wednesday, cash dealers said. Spot cash soybean bids were unchanged in Decatur, up 1 cent in Des Moines, Iowa, and down 1 1/2 cents in Peoria, Ill., they noted.

 

At China's Dalian Commodity Exchange, soybean futures ended firm as fears of slowing demand due to bird flu eased, brokers said. They noted China has not reported a new case of bird flu for almost a month.

 

The benchmark DCE September 2006 soybean contract rose RMB14 to settle at RMB2,682 a metric tonne. DCE September 2006 soymeal settled RMB21 higher at RMB2,287/tonne; and September 2006 contract rose RMB5 to settle at RMB5,162/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended mixed. The benchmark June CPO contract ended at MYR1,447 a metric tonne, up MYR6 from Tuesday.

 

In Rotterdam, spot soybean prices were firm and soymeal prices were weak, cash sources said.