March 15, 2007

 

CBOT Soy Outlook on Thursday: Up 2-4 cents on position squaring, outside markets

 

 

Chicago Board of Trade soybean futures are predicted to begin trading 2-to-4 cents higher Thursday, as position squaring after recent weakness, firm outside markets and follow through from higher prices in overnight trade are expected to supply support, a commission house analyst said.

 

In overnight e-CBOT trading, May soybeans rose 3 3/4 cents to US$7.57 1/4 per bushel and November gained 3 1/2 cents to US$7.95 3/4. E-CBOT volume in May was 2,005 contracts.

 

The weakness in soybeans appears to have climaxed Wednesday and the market should rebound, the commission house analyst said. The outside markets are firm and overnight soybeans were higher as well which point to a firmer start, he added.

 

Corn has been the leader of the grains and it appears that corn has stabilized after its recent weakness which should be supportive, a floor trader said. In addition, soybeans could see some short covering ahead of a private analytical firm's acreage estimate due out on Friday with continued concerns about the potential for reduced soybean acres this year, he added.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 452,600 metric tonnes for the week ended March 8, in line with the 400,000-500,000 tonnes expected by analysts.

 

A trader said the sales were in line with expectations and would have little impact.

 

The USDA announced this morning that Mexico purchased 120,000 metric tonnes of U.S. soybeans for delivery in the 2006-07 marketing year.

 

In the U.S. Midwest mainly dry conditions are forecast for Friday and Saturday with only a little light rain possible in northern sections on Saturday, DTN Meteorologix Weather said. Temperatures are expected to average below normal Friday and near-to-below normal on Saturday.

 

In Brazil, showers and thundershowers are expected through Saturday in much of the country's soy growing areas, DTN Meteorologix Weather said. Temperatures through Saturday are expected to average near-to-above normal.

 

In Argentina there is a chance for a few light showers Friday with mostly dry weather on Saturday. Temperatures are expected to average near-to-below normal in the period, DTN Meteorologix Weather said.

 

On day session open auction technical charts, May soybeans gapped open lower Wednesday but closed near the session high. Soybeans need the support of stronger corn futures to advance to the upside, a technical analyst said.

 

First resistance for March soybeans is seen at US$7.55 and then at US$7.60. First support is pegged at Wednesday's low of US$7.46 and then at US$7.39 1/2.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher in thin trade, analysts said. The May contract rose MYR15 at MYR1,960 per metric tonne.

 

Soybean futures on China's Dalian Commodity Exchange settled higher on a technical rebound analysts said, with the benchmark September 2007 contract up RMB11 at RMB3,207 per metric tonne.