January 31, 2008

 

CBOT Soy Outlook on Thursday: Down 3-5 cents, overnight theme; profit taking

 

 

Soybean futures on the Chicago Board of Trade are seen opening Thursday's day session on the defensive, following the overnight theme, with speculative profit taking from the market's 5-day string of higher finishes applying pressure.

 

CBOT soybean futures are called to start the session 3 to 5 cents lower.

 

In overnight e-CBOT trading, March soybeans were 3 3/4 cents lower at US$12.72, July soybeans were 5 1/4 cents lower at US$13.02, and November soybeans were 3 1/4 cents lower at US$12.26.

 

A quiet news front combined with lower crude oil futures and an expected lower start in U.S. stock markets are expected to apply early pressure to prices, analysts said.

 

Improved weather conditions and outlooks for crops in South America are seen weighing on the market as well, with traders saying the market's recent gains maybe a little overdone, analysts added.

 

However, supportive technical momentum, bullish longer range fundamental outlooks, solid underlying demand and strong weekly export sales in the soy products are seen providing strength to limit losses, a CBOT floor broker said.

 

A technical analyst said soybean bulls have upside near-term technical momentum and have gained more power this week. The next upside price objective for March soybeans is to push and close prices above psychological resistance at US$13.00. The next downside price objective is pushing prices below solid technical support at US$12.50.

 

First resistance for March soybeans is seen at Wednesday's high of US$12.77 1/2 and then at US$12.90. First support is seen at Wednesday's low of US$12.59 and then at US$12.47.

 

U.S. Department of Agriculture reported weekly soybean export sales were 604,500 metric tonnes for the week ended Jan. 24. 2007-08 marketing year sales totaled 488,000 tonnes. The sales were primarily for China with 149,000 metric tonnes, and unknown destinations with 105,400 tonnes. Analysts had forecast sales between 600,000 and 800,000 metric tonnes.

 

Soyoil commitments were 97,800 metric tonnes, above trade estimates of 10,000 to 60,000 tonnes. The sales were primarily to China with 30,000 tonnes, and unknown destinations with 24,500 tonnes. Soymeal sales were a net 226,400 tonnes, above trade estimates of 75,000 to 150,000 tonnes.

 

The U.S. Census Bureau upwardly revised its December soyoil stocks data Thursday, pegging stocks at 3.058 billion pounds. This is up from the 3.031 billion preliminary estimate reported in its Jan. 24 crush report.

 

The DTN Meteorlogix Weather Service said scattered showers and cooler temperatures during the past week or so have helped ease stress to crops in Argentina. Thursday's short range weather maps feature a new cold front for Saturday that was not on the maps Wednesday. This means a chance of showers and additional cooler weather during the 5 day period, Meteorlogix reports.

 

Showers through the southern belt of Brazil look to be light while northern areas continue to see moderate to heavy thunderstorms, Meteorlogix said. The rains in the north are becoming somewhat of a concern for maturing soybeans and the early harvest, Meteorlogix added in the forecast.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled almost unchanged Thursday in quiet trade. The benchmark September 2008 soybean contract settled unchanged at 4,665 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday amid expectations of a seasonal decline in palm oil production in February, said market participants. The benchmark April contract on Bursa Malaysia Derivatives ended up MYR8 at MYR3,232 a metric tonne, off an intraday low of MYR3,198/tonne set in morning trade.