January 10, 2008

 

CBOT Soy Outlook on Thursday: Down 2-4 cents; continuing overnight theme

 

 

Soybean futures on the Chicago Board of Trade are poised for a lower start to Thursday's day session, continuing the overnight theme on follow through selling from Wednesday's losses.

 

CBOT soybean futures are called to start the session 2 to 4 cents lower.

 

In overnight e-CBOT trading, January soybeans were 1 cent lower at US$12.48 per bushel, March soybeans were 2 3/4 cents lower at US$12.59 3/4, and July soybeans were 2 3/4 cents lower at US$12.89.

 

The absence of fresh supportive news, with the influence of lower crude oil and metal futures is setting the stage for early price declines, analysts said.

 

Carryover selling from Wednesday's late fund liquidation as well as trade position evening ahead of the plethora of fresh data from the U.S. Department of Agriculture's crop reports Friday is seen adding some pressure to prices as well, analysts added.

 

Lower-than-expected weekly export sales is another item leading to lower opening calls, but bullish long range fundamentals, uncertainty tied to South American crop potential and solid underlying demand remain supportive features to limit downside potential, a CBOT floor broker said.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices above the contract high of US$12.79 1/2. The next downside price objective is pushing prices below solid technical support at US$12.36.

 

First resistance for March soybeans is seen at Wednesday's high of US$12.74 and then at US$12.79 1/2. First support is seen at Wednesday's low of US$12.61 and then at this week's low of US$12.47.

 

USDA reported weekly soybean export sales were 124,600 metric tonnes for the week ended Jan. 3. 2007-08 marketing year sales of 118,400 metric tonnes were a marketing year low. The sales were primarily for Germany with 77,000 metric tonnes, and Syria with 71,500 tonnes. Analysts had forecast sales between 200,000 and 450,000 metric tonnes. Soymeal sales were a net 77,900 tonnes. Soyoil commitments were 28,200 metric tonnes, with China the primary buyer of 42,600 tonnes.

 

USDA is scheduled to release its January crop production, supply and demand, and quarterly grain stocks projections Friday at 8:30 a.m. EST. The average of analysts' estimates peg 2007-08 U.S. soybean ending stocks at 170 million bushels, down 15 million from December's forecast. The average of analysts' estimates point toward 2007 soybean production at 2.584 billion bushels, down from 2,594 in November. The average of analysts' estimates project Dec. 1 U.S. soybean stocks at 2.268 billion bushels from estimates that ranged from 2.240 billion to 2.316 billion bushels.

 

The DTN Meteorlogix Weather Service said total rainfall from a current weather system in Argentina is expected to range from 0.30-1.50 inches in the major corn and soybean areas. This will ease stress to pollinating corn and developing soybeans but not end the concern over crop conditions as we move forward, Meteorlogix said. High pressure aloft is projected to build back into the region over the weekend into early next week promoting another round of hot, dry weather. This ridge is expected to drift westward towards the Chilean coast during the middle of next week allowing for some rain to develop in the corn and soybean areas however this is uncertain, Meteorlogix added.

 

In deliveries, January soybean deliveries totaled 520 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing an issuer and stopper of 178 and 240 lots respectively. The last trade date assigned was Jan. 9.

 

January soymeal deliveries totaled 1,240 lots. Customer accounts at Man Professional Clearing issued and stopped 872 and 555 lots respectively. The last trade date assigned was Jan. 9.

 

January soyoil deliveries totaled 1,367 lots. Customer accounts at Man Professional Clearing issued and stopped 655 and 209 lots respectively. The last trade date assigned was Jan. 9.

 

In other news, China's soybean imports in 2007 totaled 30.82 million metric tonnes, up around 9% from a year earlier, a person familiar with the matter said Thursday. China's soybean imports during the first 11 months totaled 27.89 million tonnes, up 8.1% on year.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, after the government warned the market of price control measures. The benchmark September 2008 soybean contract settled RMB40 lower at 4,690 a metric tonne.