March 13, 2008

 

CBOT Soy Outlook on Thursday: Up 15-20 cents, outside influences, demand

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session higher, buoyed by speculative buying associated with supportive outside influences and underlying demand.

 

CBOT soybean futures are called to start the session 15 to 20 cents higher.

 

In overnight electronic trading, May soybeans were 19 3/4 cents higher at US$14.14 3/4, July soybeans were 18 1/2 cents higher at US$14.29. May soyoil was 75 points higher at 62.99 cents per pound and May soymeal was US$6.00 higher at US$356.50 per short tonne.

 

Soybeans are poised for a firm start, benefiting from broad-based buying in commodities as record high crude oil futures, a spike in gold prices above US$1,000 an ounce and a weak U.S. dollar attract inflationary buying, said Jason Roose, an analyst with U.S. Commodities.

 

Solid underlying demand is expected to aide the firm tone, with higher-than-expected weekly export sales in the soy products supporting soybeans, analysts said.

 

Continued short covering following the market's corrective move over the past week should lend support as well, Roose said. Meanwhile, Argentina's export tax increase makes U.S. soy exports look a little more attractive, and with dry weather continuing to cover China's northern grain belt, traders remain optimistic for continued strong demand from China in world markets, Roose adds.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at US$14.69 1/2 a bushel, which would fill on the upside a big downside price gap on the daily bar chart. The next downside price objective is pushing and closing prices below solid support at this week's low of US$13.71.

 

First resistance for July soybeans is seen at Wednesday's high of US$14.28 and then at US$14.51. First support is seen at Wednesday's low of US$13.99 and then at US$13.71.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on expected supply pressure ahead of the arrival of new South American soybeans. The benchmark January 2009 soybean contract settled RMB19 lower at RMB4,451 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday amid rampant speculative trading, taking cues from fluctuating soyoil prices and higher tax on soybeans in Argentina, said trade participants. The benchmark May contract on Bursa Malaysia Derivatives ended MYR33 higher at MYR3,798 a metric tonne after reaching a high of MYR3,875/tonne.

 

U.S. Department of Agriculture reported total weekly soybean export sales were 381,500 metric tonnes for the week ended March 6. 2007-08 marketing year sales totaled 257,600 tonnes. The sales were primarily for the Mexico with 142,200 metric tonnes, and China with 71,100 tonnes. Analysts had forecast sales between 250,000 and 600,000 metric tonnes.

 

Soy meal sales were a net 149,900 tonnes, above trade estimates that ranged from 25,000 to 75,000 tonnes. Soy oil commitments were 29,100 metric tonnes, above trade estimates of 5,000 to 20,000 tonnes.

 

In deliveries, March soybean deliveries totaled 689 lots. Customer accounts at Man Professional Clearing issued and stopped 334 and 363 lots respectively. The last trade date assigned was March 12.

 

March soymeal deliveries totaled 613 lots. Customer accounts at Man Professional Clearing issued and stopped 374 and 383 lots respectively. The last trade date assigned was March 12.

 

March soyoil deliveries totaled 730 lots. Issuers were scattered among various commission houses, with customer accounts at Newedge USA the primary stopper of 524 lots. The last trade date assigned was March 12.