April 12, 2007

 

CBOT Soy Outlook on Thursday: Down 3-5 cents, following overnight trend

 

 

Chicago Board of Trade soybean futures are seen opening Thursday's day session on weak footing, continuing the overnight theme amid technical pressure, analysts said.

 

In e-CBOT trade, May was 4 1/2 cents lower at US$7.42, July was 5 1/4 cents lower at US$7.58 3/4, and November soybeans were 5 1/2 cents lower at US$7.86 1/4.

 

CBOT soybean futures are called to start the session 3 to 5 cents per bushel lower.

 

The market is seen influenced by technical pressures, with futures taking on a bearish technical trend recently amid the absence of fresh fundamental support, analysts said.

 

Lingering concerns that current wet, cold conditions may delay some corn plantings and possibly shift some acres to soybeans remains a defensive presence despite mid-range forecasts calling for warmer and drier conditions across the Midwest, analysts added.

 

However, futures are finding support at the lower end of a month-long trading range, and traders will eye those support levels for clues to near- term direction. Nevertheless, without fresh supportive news, futures are maintaining a defensive posture, with export demand shifting to South American origins, traders said.

 

A technical analyst said July soybean prices are presently still in the lower boundary of a wide trading range bound by the March low of US$7.54 and the April high of US$8.01. Soybean bulls would regain technical momentum by producing a close above solid chart resistance at this week's high of US$7.86. The next downside price objective is closing prices below solid support at US$7.54.

 

First resistance for July soybeans is seen at Wednesday's high of 7.67 and then at US$7.70. First support is seen at Wednesday's low of US$7.58 1/2 and then at US$7.54.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 143,300 metric tonnes for the week ended April 5. Included in the total were sales of 6,300 metric tonnes for the 2007-08 marketing year. The 2006-07 sales were a marketing-year low, 47% lower than the previous week, and 64% below the prior four-week average. Analysts had forecast sales between 200,000 and 400,000 metric tonnes. The principal buyers were Japan with 43,800 metric tonnes and Mexico buying 38,200 tonnes. Soymeal sales were a net 221,100 tonnes, and soyoil commitments were 3,400 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest Thursday and early Friday. There is a chance for light to moderate precipitation through central and northern Missouri and southern Iowa later Friday into Saturday. Temperatures will average below normal. Mainly dry conditions are seen for Sunday and Monday, with temperatures averaging below normal Sunday, near to above normal west and below normal east Monday, Meteorlogix forecasts.

 

In the eastern Midwest, snow or rain may linger through northern areas Thursday, while turning drier through southern parts of the region. Mainly dry conditions are expected for early Friday. Snow or rain develops through southern and east-central areas late Friday and continues Saturday. Temperatures will average below normal. Mainly dry conditions are seen for Sunday and Monday, with temperatures averaging below normal.

 

The Meteorlogix 6-10-day outlook for the Midwest calls for temperatures to average near to above normal west, and below normal in eastern parts of the region. Precipitation is seen near to above normal far west and south, and near to below normal elsewhere in the region.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday as the arrival of soybean imports from South America pressured the market. The benchmark September 2007 contract settled RMB28 lower at RMB3,177 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower Thursday as participants took profits a day after the market reached a near-8 1/2-year high. The benchmark June contract ended at MYR2,175 a metric tonne, down MYR13 from Wednesday after moving between MYR2,155 and MYR2,197/tonne.