January 24, 2008

 

CBOT Soy Outlook on Thursday: Up 15-17 cents; rebound on outside market strength

 

 

Chicago Board of Trade soybean futures are poised for a firm start to Thursday's day session, rebounding from Wednesday's limit down close as global equity markets stabilize.

 

CBOT soybean futures are called to start the session 15 to 17 cents higher.

 

In overnight e-CBOT trading, March soybeans were 17 cents higher at US$12.06 1/2, July soybeans were 18 1/2 cent higher at US$12.39 1/4, and November soybeans were 9 cents higher at US$11.76 1/2.

 

The sharp bounce in the U.S. stock market Wednesday is giving traders confidence that recessionary fears are ebbing, analysts said.

 

So much of the market's movements are tied to money flow, and with the investment community less leery of financial jitters, analysts expect the market will return some of its focus back to bullish longer range fundamentals, analysts added.

 

Ideas that the market's sharp break is a little overdone coupled with gains in crude oil and metal futures is adding strength, with traders keeping an eye on major moving average support resting beneath Wednesday's limit down close, a CBOT floor broker said.

 

A technical analyst said near-term chart damage has been inflicted recently, with market bulls spooked and that may well prompt more long liquidation in the near term.

 

The next downside price objective for March soybeans is pushing prices below solid technical support at US$11.75. First resistance for March soybeans is seen at US$12.00 and then at US$12.20. First support is seen at US$11.83 and then at US$11.75.

 

The DTN Meteorlogix Weather Service said moisture stress continues to developing soybeans in Argentina's major growing areas. Some shower activity is possible in western growing areas during this weekend but this is not expected to be a significant system. The 5 day period is not very hot. The 6-10 day period may be hotter, but this is a long range outlook and subject to significant day to day changes, Meteorlogix said.

 

The U.S. Census Bureau pegged the December crush at 162.401 million bushels, up from the November crush figure of 155.7 million bushels. In a survey of analysts, the average estimates were 165 million bushels. December soymeal stocks were reported at 405,458 short tonnes, up from the 294,768 tonnes in November, as well as above the average of estimates at 368,000. Soyoil stocks came in at 3.030 billion pounds, down from November stocks of 3.044 billion, and below the average estimate of 3.084 billion pounds.

 

In other news, Brazil's Agriculture Minister, Reinhold Stephanes, said that soy farming was the not the reason for a surprising increase in Amazon deforestation in late 2007, the local Estado newswire reported Thursday. After years of a slowdown, more than 3,200 square kilometers have been cut out of the Amazon region, Estado newswire reported Thursday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday after CBOT soybeans hit limit-down Wednesday. The benchmark September 2008 soybean contract settled RMB76 lower at RMB4,531 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange traded heavily both ways Thursday, ending sharply higher on the recovery in crude oil and soyoil futures. The benchmark April contract moved in a MYR185 band, ending MYR96 higher at MYR3,211 a metric tonne.