April 17, 2008

 

CBOT Soy Outlook on Thursday: Up 10-15 cents, following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session higher, taking its cue from overnight price strength, as the market rekindles its bullish psychology after Wednesday's setback.

 

CBOT soybean futures are called to start the session 10 to 15 cents higher.

 

In overnight electronic trading, July soybeans were 16 1/2 cents higher at US$13.77 1/2, November soybeans were 12 1/2 cents higher at US$12.86. July soyoil was 56 points higher at 62.84 cents per pound and July soymeal was US$2.50 higher US$347.30 per short tonne.

 

The fundamentals of the market have not changed and Wednesday's consolidative setback was not indicative of a topping market, and that is opening the door for prices to bounce Thursday, analysts said.

 

The uncertainties of 2008 acreage with Midwest weather delaying corn plantings across the Midwest as well as concerns surrounding the unsettled issues in Argentina that may lead to increased U.S. export demand is expected to provide underlying support, analysts added.

 

Meanwhile, solid underlying domestic demand with firm cash basis levels in the interior is seen supporting prices also.

 

An overall quiet news front will keep attention on technical factors, with the daily influence of outside inflationary markets seen impacting overall price movement as well, traders said.

 

Crude oil futures set another record high and the U.S. dollar sank to a new record low below reversing their moves in overnight trade.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at this week's high of US$14.15 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$13.38 3/4, which would fill on the downside an upside price gap on the daily bar chart.

 

First resistance for July soybeans is seen at US$13.72 and then at US$14.00. First support is seen at Wednesday's low of US$13.51 and then at US$13.38 3/4.

 

U.S. Department of Agriculture reported total weekly soybean export sales were 477,700 metric tonnes for the week ended April 10. The 2007-08 marketing year sales totaled 477,000 tonnes. The sales were primarily to China with 372,500 metric tonnes, and Germany with 65,400 tonnes. Analysts had forecast sales between 200,000 and 500,000 metric tonnes.

 

Soymeal sales were a net 176,500 tonnes, above trade estimates that ranged from 75,000 to 175,000 tonnes. Soy oil commitments were 7,300 metric tonnes, below trade estimates of 10,000 to 30,000 tonnes.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday on concern about price control measures. The benchmark January 2009 soybean contract settled RMB11, or 0.26%, higher at RMB4,169 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday in lackluster, range bound trading amid prospects of higher than initially anticipated output. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR42 lower at MYR3,632/tonne.