February 28, 2008

 

CBOT Soy Outlook on Thursday: Up 4-6 cents; fundamental strength underpins

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session on firm footing, rebounding from Wednesday's losses on fundamental strength.

 

CBOT soybean futures are called to start the session 4 to 6 cents higher.

 

In overnight electronic trading, March soybeans were 6 1/4 cents higher at US$14.65 1/4, May soybeans were 6 cents higher at US$14.81 1/4, July soybeans were 6 1/4 cents higher at US$14.95, and November soybeans were 3 3/4 cents lower at US$14.03 1/4.

 

Technical and fundamental strength continues to serve as an underpinning feature in the market, with speculative and commercial buying emerging on price breaks, analysts said.

 

The fundamental outlook of the market is holding sellers at bay, with supportive product consumption and firm outside markets expected lend strength to prices as well, analysts added.

 

However, positioning ahead of the delivery period for March futures and end-of-the-month profit-taking is expected to generate light pressure if speculative funds don't rekindle their aggressive buying interest, a CBOT floor analyst said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid resistance at the contract high of US$15.05 a bushel. The next downside price objective is pushing and closing prices below support at US$14.54, which would fill on the downside an upside price gap on the daily bar chart.

 

First resistance for July soybeans is seen at Wednesday's high of US$14.98 and then at US$15.05. First support is seen at Wednesday's low of US$14.77 and then at US$14.71.

 

U.S. Department of Agriculture reported total weekly soybean export sales were 616,200 metric tonnes for the week ended Feb. 21. 2007-08 marketing year sales totaled 583,700 tonnes. The sales were primarily for China with 225,500 metric tonnes, Egypt with 123,500 tonnes and Japan with 100,500. Analysts had forecast sales between 400,000 and 650,000 metric tonnes.

 

Soy meal sales were a net 102,800 tonnes, in line with trade estimates of 75,000 to 125,000 tonnes. Soy oil commitments were 25,700 metric tonnes, above trade estimates of 10,000 to 20,000 tonnes.

 

The U.S. Census Bureau pegged the January crush at 160.284 million bushels, down from the December crush figure of 163.9 million bushels. In a survey of analysts, the average of estimates was 161 million bushels. January soy meal stocks were reported at 294,667 short tonnes, down from the 422,006 tonnes in December, as well as below the average of estimates at 320,000. Soy oil stocks came in at 3.094 billion pounds, up from December stocks of 3.077 billion but below the average estimate of 3.158 billion pounds.

 

The DTN Meteorlogix weather forecast said rain and thunderstorms through Rio Grande do Sul and southern Parana in Brazil during the next few days will favor filling soybeans. The rains should also increase through central and northern areas during this period, leading to some harvest delays.

 

In Argentina, scattered to widely scattered thundershowers during the past 24 hours will help maintain soil moisture for filling crops, Meteorlogix said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, tracking Wednesday's losses at CBOT. The new benchmark January 2009 soybean contract settled RMB47 lower at 4,698 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Thursday on mild profit-taking amid speculation of only small growth in exports and volatility in soy oil prices, trade participants said. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR14 lower at MYR3,850 a tonne.