January 3, 2008

 

CBOT Soy Outlook on Thursday: Up 8-10 cents on follow-through spec buys

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session higher, buoyed by follow through speculative buying with bullish inflationary signals Argentine weather concerns underpinning features.

 

CBOT soybean futures are called to start the session 8 to 10 cents higher.

 

In overnight e-CBOT trading, January soybeans were 10 cents higher at US$12.42 1/2 per bushel, and March soybeans were 8 3/4 cents higher at US$12.57 1/2.

 

Renewed speculative fund buying interest to start the year is keeping bullish momentum intact, with bullish long range outlooks setting the stage for the higher theme, analysts said.

 

Traders anticipate increased speculative capital to move into the commodity arena early in the 2008 calendar year and with outlooks for demand to outstrip supply in the near term, buyers continue to maintain a dominant presence in the market place, analysts added.

 

Technical strength is seen aiding the supportive tone, with lingering concerns over heat and dryness stress to Argentine soybean crops, and outlooks for a tighter U.S. soybean balance sheet when the U.S. Department of Agriculture releases its latest crop reports next week is promoting upside momentum as well, traders added.

 

Meanwhile, a market technician said soybeans appear poised to soon challenge the all-time high of US$12.90 a bushel, scored in 1973. The next upside price objective for March soybeans is to push and close prices above that US$12.90 a bushel. The next downside price objective is closing prices below major psychological technical support at US$12.00.

 

First resistance for March soybeans is seen at Wednesday's contract high of US$12.64 and then at US$12.90. First support is seen at Wednesday's low of US$12.36 and then at US$12.18 - the bottom of Wednesday's upside price gap on the daily bar chart.

 

The DTN Meteorlogix Weather Service said conditions in Argentina were hot again Wednesday, but Thursday's temperatures are not seen as hot. Long range charts suggest a chance for thunderstorms and cooler temperatures early next week. In Brazil, periodic shower activity and warm temperatures will favor developing soybeans during the next week to 10 days, Meteorlogix forecasts.

 

In deliveries, January soybean deliveries totaled 449 lots. A customer account at Fortis issued 246 lots, with a customer account at Bank of America Securities a stopper of 445 lots. The last trade date assigned was Dec. 21.

 

January soymeal deliveries totaled 1,347 lots. Customer accounts at Man Professional Clearing issued and stopped 1,258 and 816 lots respectively. The last trade date assigned was Jan. 2.

 

January soyoil deliveries totaled 4,569 lots. Customer accounts at Man Professional Clearing issued and stopped 2,330 and 1,766 lots respectively. The last trade date assigned was Jan. 2.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled at new highs Thursday on strong soybean cash prices. The benchmark September 2008 soybean contract settled RMB84 higher at 4,776 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended sharply higher for a second straight day Thursday, on renewed flooding in oil palm regions and gains in crude oil and palm oil prices, trade participants said. The benchmark March contract on Bursa Malaysia Derivatives ended MYR53 higher at MYR3,135/tonne after reaching an all time high of MYR3,159/tonne on the opening bell.