April 5, 2007

  

CBOT Soy Outlook on Thursday: Up 1-3 cents; in tune with e-CBOT theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's session higher, in tune with overnight trade, as the market attempts to correct recent setbacks, analysts said.

 

In e-CBOT trade, May was 2 1/2 cents higher at US$7.63 1/2 and November soybeans were 2 1/4 cents higher at US$8.07 1/2.

 

CBOT soybean futures are called to start the session 1 to 3 cents per bushel higher.

 

The overnight theme will influence prices to start the day, with pre-holiday weekend positioning following recent declines supporting prices, an analyst said.

 

Underlying technical support, with speculative traders continuing to defend major moving average support is expected to promote a firmer tone as well, a trader added. However, without fresh supportive fundamental news, upside potential maybe limited, he added.

 

Cold, wet conditions in the Midwest is seen as an anchor on soybean prices, as thoughts of plantings delays for corn could ultimately lead to increased soybean acreage, analysts added. Weekly export sales came in below expectations and are seen applying light pressure, while a downward revision in Census soyoil stocks maybe supportive to soyoil futures.

 

A technical analyst said soybean bulls would regain technical momentum by producing a close above solid chart resistance at this week's high of US$7.87 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$7.68 and then at Wednesday's high of US$7.72 1/2. First support is seen at Wednesday's low of US$7.60 and then at US$7.55.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest through Sunday. Light precipitation may develop in western and northern parts of the region Monday. Temperatures will average well below normal, with the lowest temperatures ranging from the low teens to the low 20s Fahrenheit.

 

In the eastern Midwest, mainly dry conditions are expected for the next five days, but windy conditions are on tap for the next two days. Temperatures will average well below normal. The lowest temperatures will range from the teens to the low 20s F, this includes areas in southeast Missouri, western and northern Kentucky and all of Ohio, Meteorlogix forecasts.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 295,300 metric tonnes for the week ended March 29. Included in the total were sales of 36,300 metric tonnes for the 2007-08 marketing year. The 2006-07 sales were a marketing year low, 4% lower than the previous week, and 43% below the prior four week average. Analysts had forecast sales between 300,000 and 350,000 metric tonnes. The principal buyers were Japan with 191,200 metric tonnes and the Netherlands buying 135,000 tonnes. Soymeal sales were a net 119,500 tonnes, and soyoil commitments were 13,800 metric tonnes.

 

The U.S. Census Bureau revised its February soyoil stocks figure, lowering the February stocks figure to 3.283 billion pounds from the 3.318 reported March 22. The figure is up from January's stocks of 3.182 billion pounds but well above the 2.673 billion pounds reported at the same time last year.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled little changed Thursday, with long liquidation triggered by losses in CBOT soybean futures Wednesday weighing on prices. The benchmark September 2007 contract fell RMB4 to settle at RMB3,258 a metric tonne, after trading between RMB3,250/tonne and RMB3,270/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Thursday as the market succumbed to profit-taking pressure after rallying to new eight-year highs. The benchmark June contract ended down MYR25 at MYR2,090 a metric tonne.