February 29, 2008

 

CBOT Soy Outlook on Friday: Up 12-15 cents; highs overnight, global strength

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session on firm footing, extending the overnight session's run to record highs on bullish world soy fundamentals.

 

CBOT soybean futures are called to start the session 12 to 15 cents higher.

 

In overnight electronic trading, March soybeans were 12 3/4 cents higher at US$15.11 1/4, May soybeans were 16 1/4 cents higher at US$15.28 3/4, July soybeans were 20 cents higher at US$15.43 3/4, and November soybeans were 12 cents higher at US$14.36.

 

The market is poised to continue its bullish uptrend, with record high price moves in crude oil and Asian soybean and vegoils markets illicit speculative buying, analysts said.

 

However, a modest downturn in crude oil prices in early action, end of the month profit taking and overbought conditions may attract selling pressure to cap upside potential, analysts added.

 

Nevertheless, soyoil remains the bullish driver of the soycomplex, and with crude oil's record high prices, global tight vegetable oil supply, as well as weakness in the U.S. dollar, the market remains firmly underpinned, traders added. Fresh speculative money continues to flow into commodities on inflationary concerns, and without any bearish influences there still is no strong warning signals that a market top is close at hand, analysts said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above resistance at US$15.50 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 Thursday's contract high of US$15.27 and then at US$15.50. First support is seen at US$15.00 and then at Thursday's low of US$14.88 1/2.

 

In deliveries, March soybean deliveries totaled 1,778 lots. Issuers and stoppers were scattered among various commission houses, with the house account at Term Commodities the primary issuer of 1,129 lots. The last trade date assigned was Feb. 25.

 

March soymeal deliveries totaled 1,277 lots. Customer accounts at Man Professional Clearing issued and stopped 947 and 1,100 lots respectively. The last trade date assigned was Feb. 27.

 

March soyoil deliveries totaled 3,925 lots. The house account at Term Commodities issued 1,423 lots. Customer accounts at Astro Clearing and RJ O'Brien stopped 1,174 and 949 lots respectively. The house account at ADM Investor Services stopped 519 lots. The last trade date assigned was Feb. 27.

 

In other news, Chinese soybean importers booked five-seven cargoes of soybeans from South America this week, according to data issued by commodities analysis firm Shanghai JCI Friday. The volume fell from the nine-11 cargoes in the previous week as surging soybean prices curbed demand, Shanghai JCI said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled at fresh highs Friday after crude oil prices rose to a record high overnight. The new benchmark January 2009 soybean contract settled RMB84 higher at RMB4,782 a metric tonne.

 

Cash soybean prices in China's major producing regions continued to surge in the week to Friday on tight supply and a rally in soyoil prices.

 

Crude palm oil futures on Malaysia's derivatives exchange hit an all-time high Friday, breaking through MYR4,000 a metric tonne for the first time on rising soyoil prices and strong crude futures. The benchmark May contract on Bursa Malaysia Derivatives ended MYR155 higher at MYR4,005/tonne after touching an all-time high of MYR4,013/tonne.

 

World coconut oil prices hit an all-time new high this week, boosted by the bullish influence of outside markets, with most buyers on the sidelines, traders said.