January 11, 2007

 

CBOT Soy Outlook: Up 6-8 cents on e-CBOT theme, corn spillover

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's session on firm footing, continuing the overnight theme, with spillover support from corn futures aiding the higher tonnee, analysts said.

 

Soybean futures are called to open 6 to 8 cents higher.

 

In e-CBOT trade, January soybeans were 6 cents higher at US$6.59 3/4 and March was 7 3/4 cents higher at US$6.72 1/2 per bushel.

 

Carryover buying from Wednesday's recovery from 2-month lows is expected to provide a boost to prices, with borrowed momentum from corn helping futures find stability following prior price setbacks, a CBOT floor analyst said.

 

Technical considerations are seen as a focal point, with positioning ahead of Friday's crop reports featured. Nevertheless, favorable South American crop outlooks and ample nearby supplies remain defensive influences to limit upside potential, traders added.

 

A market technician said the next upside price objective for March soybeans is to close prices above solid resistance at US$6.80 a bushel. The next downside price objective is closing prices below solid support at Wednesday's low of US$6.57.

 

First resistance for March soybeans is seen at Wednesday's high of US$6.70 and then at US$6.74 1/2 - the top of this week's downside price gap on the daily chart. First support is seen at US$6.60 and then at Wednesday's low of US$6.57.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 589,500 metric tonnes. Trade estimates called for commitments in the 350,000 to 550,000 tonne range. The biggest buyers were China, buying 252,000 tonnes.

 

Soymeal sales were 101,500 tonnes. Analysts' estimates called for commitments in a range of 50,000 to 100,000 tonnes. Soyoil 2006-07 sales were a net reduction of 1,300 tonnes. The trade guess was 5,000 to 10,000 tonnes.

 

USDA said private exporters reported the sales of 180,000 metric tonnes of Soybeans to China for delivery during the 2006/2007 marketing year.

 

The DTN Meteorlogix weather forecast said scattered showers and thunderstorms in Argentina during the past 24 hours is maintaining very favorable conditions for developing soybeans. In Brazil, developing showers and thunderstorms in Rio Grande do Sul and Parana the next few days will maintain favorable growing conditions. Wet weather returns to the Mato Grosso, Goias, Sao Paulo and Minas Gerias over the weekend into next week raising concerns over the development of soybean rust, Meteorlogix reports.

 

The U.S. Census Bureau revised its November soyoil stocks figure, cutting the November stocks figure to 3.074 billion pounds from the 3.096 reported Dec. 21. The figure is up from October's stocks of 3.015 billion pounds but well above the 1.852 billion pounds reported at the same time last year.

 

USDA is scheduled to release its annual production, supply and demand and quarterly grain stocks reports Friday 8:30 a.m. EST. The average of trade estimates compiled by Dow Jones pegs production at 3.235 billion bushels up from USDA's November projection of 3.204 billion. The carryout estimate is 586 million bushels up from December USDA of 565 million bushels. Dec. 1 stocks are pegged at 2.736 billion bushels.

 

In news, the National Commodities Supply Corp., or Conab, said Thursday that Brazil's 2006-07 soybean crop should be a record 54.9 million metric tonnes. The crop is 2.7% greater than the 2005-06 crop of 53.4 million tonnes. The new estimate is greater than the 54.7 million tonnes Conab published in December. National yields were put at 2,655 kilograms per hectare, or roughly 44 60-kilogram bags per hectare. The 2005-06 season saw yields closer to 2,403 kilograms per hectare, or 40 bags per hectare.

 

In deliveries, a total of 584 delivery notices were posted against January soybeans. The last trade date assigned was January 10. 326 delivery notices were posted against the January soyoil futures. The last trade date assigned was Jan. 9. Soymeal delivery notices totaled 80 lots, with the house account at ADM Investor Services stopping all 80 lots. The last trade date assigned was Jan. 5.

 

Rotterdam soybeans and soymeal were mostly higher. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Thursday, tracking Wednesday's gains in CBOT soybeans. The May 2007 contract settled RMB24 higher at RMB2,838 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday after a largely uneventful trading day, with short covering helping the market recover slightly from recent steep declines, analysts said. The benchmark March contract ended up MYR19 at MYR1,900 a metric tonne.