March 22, 2007

 

CBOT Soy Outlook on Thursday: Down 2-3 cents, taking the cue from overnight trade

 

 

Soybeans futures on the Chicago Board of Trade are called to open 2 to 3 cents per bushel lower, taking their cue from overnight trade, with light profit taking from prior gains seen weighing on prices.

 

In e-CBOT trade, May was 2 1/2 cents lower at US$7.64 and November soybeans were 3 1/4 cents lower at US$8.07 1/2.

 

The market is set for a lower start, with mild weakness from Wednesday's failure to attract follow through buying at session highs attracting some profit taking pressure from recent gains, analysts said.

 

The market has few influences to direct prices, and with crush and export data routine, traders continue to take a cautious approach, on guard for two-sided action, a CBOT floor analyst said.

 

Technical factors will remain in play, with underlying support anticipated from acreage uncertainties and strength in outside metal and energy markets. Meanwhile upside potential is seen limited by South American hedging, traders added.

 

A technical analyst said despite prices closing near the session low after hitting a fresh three-week high early on, market bulls are regaining some near-term technical momentum. The market would gain better technical momentum by producing a close above solid chart resistance at Wednesday's high of US$7.73 basis May futures. The next downside price objective is closing prices below solid support at US$7.50.

 

First resistance for May soybeans is seen at US$7.70 3/4 and then at US$7.73. First support is seen at Wednesday's low of US$7.64 1/4 and then at US$7.60.

 

The Census Bureau reported soybeans crushed in February totaled 136.9 million bushels. The figure was below the average survey estimate of 137.9 million bushels, down from January's 156.9 million and on par with last year's 136.3 million. Soyoil stocks climbed to 3.318 billion pounds from January's 3.202 billion. The average of survey estimates was 3.217 billion pounds. Soymeal stocks were reported at 292,640 short tonnes. The stock figure was down from January's 372,675 and below the average estimate of 356,000.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 523,300 metric tonnes for the week ended March 15. Included in the total were sales of 1,000 metric tonnes for the 2007-08 marketing year. The sales were 16% higher than the previous week, but equal to the prior four week average. Analysts had forecast sales between 350,000 and 550,000 metric tonnes. The principal buyers were Mexico with 233,400 metric tonnes and China buying 127,500 tonnes. Soymeal sales were 17,500 tonnes, down 94% from the previous week. Soyoil commitments totaled 10,100 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said moderate to heavy rainfall is possible through the eastern Midwest during the next few days. This should keep early spring field work slow. A more favorable weather pattern for field work is in store for the Delta.

 

In other news, Argentine farmers are expected to harvest a record 45.6 million metric tonnes of 2006-07 soybeans, the Agriculture Secretariat said late Wednesday in its monthly crop report for March. The figure is up from its previous forecast of between 42.5 and 44.5 million tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday as ample supply on the local market offset the positive impact from Wednesday CBOT gains. The benchmark September contract settled RMB8 lower at RMB3,218/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended a tad lower Thursday as conflicting factors continued to keep the market confined to a narrow range. The benchmark June contract ended down MYR4 at MYR1,971 a metric tonne.