March 6, 2008

 

CBOT Soy Outlook on Thursday: Seen firmer; following overnight theme

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's day session higher on follow through buying from overnight trade, analysts said.

 

CBOT soybean futures are called to start the session 7 to 10 cents higher.

 

In overnight electronic trading, May soybeans were 17 1/4 cents higher at US$15.28, July soybeans were 18 cents higher at US$15.38. May soyoil was 34 points higher at 67.67 cents per pound and May soymeal was US$0.10 higher at US$382.10 per short tonne.

 

The overnight recovery from Wednesday's late declines is seen leading prices higher, with a continuation of speculative money flow into commodities serving as an underpinning feature, analysts said.

 

However, a mixed tone in outside inflationary markets early Thursday may temper advances, with traders leery of the market showing signs of upside exhaustion following price setbacks in soybeans and soyoil, a CBOT floor broker added.

 

Meanwhile, lackluster weekly export sales are raising thoughts of slowing demand, with overnight losses in Malaysian palm oil futures and the progression of the South American harvest applying mild pressure as well, he added.

 

A technical analyst said Wednesday marked the third session in a row of a low-range close, and that's a bit worrisome for market bulls. The next upside price objective for July soybeans is to push and close prices above solid resistance at US$15.67 a bushel, which is the top of a price gap on the daily chart. The next downside price objective is pushing and closing prices below major psychological support at US$15.00.

 

First resistance for July soybeans is seen at US$15.48 and then at US$15.67. First support is seen at US$15.00 and then at US$14.88.

 

U.S. Department of Agriculture reported total weekly soybean export sales were 204,600 metric tonnes for the week ended Feb. 28. 2007-08 marketing year sales totaled 202,700 tonnes. The sales were primarily for the Netherlands with 79,400 metric tonnes, and Spain with 66,800 tonnes. Analysts had forecast sales between 300,000 and 500,000 metric tonnes.

 

Soy meal sales were a net 75,900 tonnes, at the high end of trade estimates that ranged from 25,000 to 75,000 tonnes. Soy oil commitments were 6,800 metric tonnes, in line with trade estimates of 5,000 to 10,000 tonnes.

 

The U.S. Census Bureau downwardly revised its January soyoil stocks data Thursday, pegging stocks at 3.071 billion pounds. This is down from the 3.094 billion preliminary estimate reported in its Feb. 28 crush report.

 

In deliveries, March soybean deliveries totaled 1,469 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was March 5.

 

March soymeal deliveries totaled 117 lots. Customer accounts at Man Professional Clearing issued and stopped 72 and 52 lots respectively. The last trade date assigned was March 4.

 

March soyoil deliveries totaled 1,835 lots. Customer accounts at Man Professional Clearing issued and stopped 789 and 847 lots respectively. The last trade date assigned was March 5.

 

In overseas markets, soybean futures traded at the Dalian Commodity Exchange settled mostly higher Thursday, tracking gains made in overnight electronic trading in soybeans and soyoil at CBOT.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday on liquidation of long positions and lower soyoil prices, but partially recovered from steep losses amid heavy volatile trading on strong fundamentals, trade participants said. The benchmark May contract on Bursa Malaysia Derivatives ended MYR92 lower at MYR4,003 a metric tonne, recovering from intraday low of MYR3,958/tonne.

 

In other news, the National Commodities Supply Corp, Conab, said Thursday, Brazil should harvest 59.5 million tonnes of soybeans in the 2007-08 crop. The number is up from Conab's February estimate of 58.5 million tonnes, and 2.1%, or 1.2 million tonnes, higher than 2006-07 year end production totals.