February 1, 2007

 

CBOT Soy Outlook on Thursday: Firmer start on export sales, overnight

 

 

Strong export sales and follow-through speculative buying from the overnight are expected to push Chicago Board of Trade soybean futures to a firmer start for Thursday's day session, analysts said.

 

Soybean futures are called to open up 3 to 4 cents per bushel.

 

In e-cbot overnight trade, CBOT March soybeans rose 3 1/2 cents to US$7.23.

 

The U.S. Department of Agriculture announced Thursday that weekly U.S. soybean export sales for the week ended Jan. 25 were 677,700 metric tonnes, slightly above analysts' expectations of 450,000 to 650,000 tonnes. The sales were 10% above the previous week and 3% above the prior 4-week average.

 

Major buyers included China, which took 177,200 tonnes, and Mexico, which bought 135,900 tonnes, according to the USDA.

 

Weekly soymeal and soyoil export sales also exceeded expectations.

 

The USDA said soymeal sales totaled 160,500 tonnes, while analysts had predicted 25,000 to 125,000 tonnes. Canada was the top buyer with 52,600 tonnes.

 

Soyoil sales, meanwhile, were 37,300 tonnes, above estimates of zero to 30,000 tonnes. China was the primary buyer with 26,000 tonnes, the USDA said.

 

There also may be some support for soybeans from concerns that an unfavorable weather pattern is developing in South America and increasing dryness in the Argentine soybean belt, sources added.

 

The DTN Meteorlogix weather firm reported there are currently favorable conditions for developing soybeans across central Argentina, although a little more rain would benefit the crop.

 

"Dry conditions may become more of an issue in the coming week with more dry weather," the firm said.

 

In Brazil, Rio Grande Do Sul may be drier and sometimes hotter during the next seven to 10 days, Meteorlogix reported. Soil moisture is adequate to surplus at this time, but it will trend drier, the firm noted.

 

Looking at the technical picture for soybeans, bulls still have upside momentum, a technical analyst said.

 

The next upside price objective for the bulls is to close March prices above solid chart resistance at Wednesday's high of US$7.29 1/4, he said. The next downside price objective for bears is closing prices below solid support at US$7.00.

 

First resistance for soybeans is seen at Wednesday's high of US$7.29 1/4 and then at US$7.35. First support is seen at Wednesday's low of US$7.17 3/4 and then at US$7.10.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Thursday in an effort to catch up with the recent rise at the CBOT, sources said. Rising soyoil prices also supported soybean prices, a trader added.

 

China's January commodities futures trading volume rose 42% on year to 40.75 million lots, according to new data. The Dalian accounted for more than half of the total turnover, with a volume of 21.30 million lots, up 6.36% on year.

 

In other news, Taiwan Sugar Corp bought 12,000 tonnes of U.S. soybeans from trading house Marubeni at a tender concluded Thursday, a trader in Taipei said. The shipment is expected to arrive in Taiwan March 8-22.