March 28, 2006

 

CBOT Soy Outlook on Tuesday: Mixed; waiting for Friday's USDA data

 

 

Soybean futures at the Chicago Board of Trade were called to open mixed Tuesday on possible fund support versus bearish fundamental inputs ahead of Friday's key U.S. Department of Agriculture data, brokers said.

 

Forecasts for rains in Brazil's soy belt, which could delay harvest this week following weekend rain-led harvest delays may support CBOT futures, but U.S. Midwest rains this week, a month ahead of plantings, could limit gains, they said.

 

Concerns about the spread of bird flu in India and this week's drop in the Brazilian real, which could spark Brazilian farmer sales, were also bearish for CBOT soy on Tuesday.

 

However, traders noted that open interest rose for CBOT soybeans on Monday's higher close, a suggestion of fresh buying instead of just short-covering, despite the fade in bellwether May soybeans into its higher settlement.

 

"We appear to be at an impasse," one trader said.

 

In overnight screen trade, the e-cbot May soybean contract settled down 1/2 cent at $5.79 a bushel. May soymeal ended unchanged at $178.80, and May soyoil closed up 0.04 cent at 22.70 cents a pound.

 

Bears are in technical control and their next downside price objective in CBOT May soybeans is a challenge of support at the January low of $5.72 1/2, or below, a technical source said. 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 $5.85 and then at $5.87 1/2--Monday's high. First support was seen at $5.76 1/2--Monday's low--and then at $5.71 1/4--last week's low.

 

Positioning was expected to be featured into Friday's USDA 2006 prospective U.S. spring plantings and quarterly stocks data as of March 1, brokers said.

 

Analysts on average expected the USDA to report Friday that U.S. farmers would seed 74.050 million acres to soybeans, up from last year's 72.142 million.

 

March 1 U.S. soybean stocks were expected to be reported at a record 1.678 billion bushels, above last year's 1.381 billion. Estimates ranged from 1.660 billion to 1.703 billion bushels.

 

U.S. Midwest cash soybean basis bids were mixed Tuesday, cash dealers said. Spot cash soybean bids were up 6 cents in Cedar Rapids, Iowa, down 6 cents in Evansville, Ind., and up 3 cents in Cincinnati, they noted.

 

At the Dalian Commodity Exchange, soybean futures settled mixed. The benchmark September 2006 soybean contract inched down RMB3 to RMB2,693 a metric tonne, after trading between RMB2,685 and RMB2,701/tonne.

 

DCE September 2006 soymeal fell RMB4 to settle at RMB2,300/tonne, after trading between RMB2,289 and RMB2,310/tonne. September 2006 soyoil contract fell RMB7 to RMB5,158/tonne, after trading between RMB5,146 and RMB5,168/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended weak amid uncertainty about the longer-term supply and demand outlook and a lack of fresh fundamental leads continued to keep most participants on the sidelines. The benchmark June CPO contract ended at MYR1,448 a metric tonne, down MYR4 from Monday.

 

In Rotterdam, spot soybean and soymeal prices were higher Tuesday, cash sources said.