May 3, 2006

Asia Soybean Outlook: Direction of premiums murky on CBOT

Premiums for soybeans delivered to Asia may swing either way, as CBOT soy futures look evenly poised to rise or fall in the week ahead.

Over the past six sessions, CBOT soy futures have had a mixed run with a variety of factors either supporting or pressuring prices.

On the bullish side, Brazil's National Commodities Supply Corp. is expected to reduce its Brazilian soy-crop projection later on Wednesday.

On the other side, record projected acreage of the U.S. soybean crop and the swift pace of soybean crop planting could potentially pressure prices.

Asian demand this week is expected to be almost non-existent as China and Japan - two major buyers - are on holiday until Friday.

In Taiwan, an official at Breakfast Soybean Procurement Association, a major soybean buying group, said, "Local demand for beans remains low in Taiwan, so we don't expect any tenders this week."

Over the past week, no major deals in soybeans or soymeal were reported in Asia.