March 29, 2007

 

CBOT Soy Outlook on Thursday: Mixed, bracing for Friday's USDA reports

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session mixed, in tune with overnight trade as the market braces for Friday's planting and stocks reports.

 

In e-CBOT trade, May was 1/4-cent higher at US$7.71 and November soybeans were 3/4-cent lower at US$8.12 1/2.

 

CBOT soybean futures are called to start the session mixed.

 

A quiet news front overnight failed to provide any directives for prices, with traders expected to square a few positions ahead of Friday's highly anticipated prospective plantings report, a CBOT floor analyst said.

 

Technical features will once again be a key influence on prices, with traders expected to play close attention to soyoil and crude oil futures after rallies in both markets provided a boost to soybeans Wednesday, analysts added.

 

Otherwise, fundamental news remains limited, with routine weekly export sales expected to keep the market's focus on Friday's acreage figure. The industry has a bullish perception for 2007 soybean acreage, but traders remain cautious ahead of the report, opening the door for volatile price moves if volumes remain light, a CBOT trader added.

 

A technical analyst said the next downside price objective for May soybeans is closing prices below solid support at US$7.50. Soybean bulls would regain better technical momentum by producing a close above solid chart resistance at last week's high of US$7.75.

 

First resistance for May soybeans is seen at 7.75 and then at US$7.77 1/2 - the top of another downside price gap on the daily chart. First support is seen at US$7.65 and then at US$7.60.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 272,100 metric tonnes for the week ended March 22. Included in the total were sales of 2,000 metric tonnes for the 2007-08 marketing year. The 2006-07 sales were a marketing year low, 48% lower than the previous week, and 45% below the prior four week average. Analysts had forecast sales between 250,000 and 500,000 metric tonnes. The principal buyers were Indonesia with 79,000 metric tonnes and China buying 76,100 tonnes. Soymeal sales were 105,300 tonnes, down 17% from the prior four week average. Soyoil commitments were a net sales reduction of 7,800 metric tonnes.

 

USDA is scheduled to release its prospective plantings and quarterly grain stocks reports Friday 8:30 a.m. EDT (1230 GMT). The average estimate of 22 analysts surveyed by Dow Jones Newswires projects 2007 US planting intentions at 69.167 million acres. The estimates ranged from 65.927 million acres to 70.800 million. In a survey of 14 analysts, the average guess for quarterly grain stocks was 1.801 billion bushels from a range of estimates from 1.765 billion to 1.830 billion.

 

The DTN Meteorlogix Weather Service forecast said showers and thunderstorms will be mainly confined to far western locations of the western Midwest. Episodes of showers, rain and possible thundershowers are on tap for Friday, Saturday and early Sunday. Light rain or drizzle may redevelop Monday. Rainfall potential during this period is 0.50-2.00 inches. Temperatures average above normal through Sunday, near to below normal west and near to above normal east Monday.

 

In the eastern Midwest, dry conditions or a few light showers are expected for Thursday and Friday. A chance for scattered showers, thundershowers and some rain exist for the weekend, with dry conditions or only a little light rain in the northwest during Monday. Rainfall potential during this period is 0.30-1.50 inches, with temperatures averaging above normal, Meteorlogix forecasts.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday on Wednesday's gains in CBOT soybean futures, but trade was quiet ahead of the USDA report due to be released Friday. The benchmark September 2007 contract rose RMB14 to settle at RMB3,216 a metric tonne, after trading between RMB3,211/tonne and RMB3,221/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally lower Thursday, as participants took profits from the market's recent rally. The benchmark June contract, which reached a new year-to-date high earlier in the week, ended at MYR2,045 a metric tonne, down MYR3 from Wednesday.