April 3, 2008

 

CBOT Soy Outlook on Thursday: Up 5-10cent on overnight, prices stabilizing

 

 

Chicago Board of Trade soybean futures are poised for a higher start to Thursday's day session, in tune with overnight price action as the market continues to stabilize from prior losses.

 

CBOT soybean futures are called to start the session 5 to 10 cents higher.

 

In overnight electronic trading, May soybeans were 5 cents higher at US$12.48, July soybeans were 5 1/2 cents higher at US$12.65. May soyoil was 20 points lower at 54.85 cents per pound and May soymeal was US$1.40 higher US$332.40 per short tonne.

 

Higher price action is expected to be the early theme for prices amid ideas the market has put in a near-term or intermediate-term low, analysts said.

 

A quiet news front is not providing much leadership for futures, but with corn prices moving to levels that make corn a more attractive planting option, soybeans are expected to move higher in an attempt to hold on to as much prospective planting acreage as the market can, analysts added.

 

Weakness in outside inflationary markets are expected to lend mild pressure to prices, but technically inspired buying, underlying demand and talk of a potential port strike in Brazil that could shift some export business to the U.S. are seen underpinning prices, traders said.

 

Brazil's federal food inspectors are threatening to strike at the ports if salary negotiations don't meet the expectations of the agents' main labor association, Anffa.

 

A technical analyst said serious near-term technical damage has been inflicted recently and market bulls have more heavy lifting to do in the near term to generate a fresh price uptrend. The next upside price objective for July soybeans is to push prices above psychological and trend-line technical resistance at US$13.00 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$12.00.

 

First resistance for July soybeans is seen at US$12.74 and then at US$13.00. First support is seen at US$12.50 and then at US$12.40.

 

U.S. Department of Agriculture reported total weekly soybean export sales were 414,800 metric tonnes for the week ended March 27. 2007-08 marketing year sales totaled 184,800- tonnes. The sales were primarily for China with 240,900 metric tonnes, and Japan with 59,000 tonnes. Analysts had forecast sales between 300,000 and 600,000 metric tonnes.

 

Soymeal sales were a net 89,300 tonnes, within trade estimates of 75,000 to 175,000 tonnes. Soy oil commitments were 55,800 metric tonnes, above trade estimates of 10,000 to 30,000 tonnes. The U.S. Census Bureau downwardly revised its February soyoil stocks data Thursday, pegging stocks at 3.076 billion pounds. This is down from the 3.101 billion previously revised preliminary estimate reported March 28.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday as funds consolidated ahead of the long weekend. The benchmark January 2009 soybean contract settled CNY13 lower, or down 0.33%, at CNY3,874 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange rose as much as 4.45% Thursday on Wednesday's rally in soybean oil prices, but failed to close above MYR3,300 amid record-high Malaysian palm oil inventories and the suspension of a strike by soybean growers in Argentina, said trade participants. The benchmark June contract on the Bursa Malaysia Derivatives ended MYR120 higher at MYR3,290 a metric tonne, off an intraday high of MYR3,311/tonne, briefly reaching a low of MYR3,230/tonne.