April 30, 2009

 

CBOT Soy Outlook on Thursday: Up; exports, outsides underpin prices

 

 

Higher-than-expected weekly export sales, supportive outside markets and declining Argentina crop estimates have Chicago Board of Trade soybean futures poised to start Thursday's day session on firm footing.

 

CBOT soybean futures are called to open 10 cents to 12 cents higher.

 

In lieu of strong export demand, higher crude oil and stock indexes, futures have a supportive foundation to extend the overnight theme, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

Follow through technical buying, and the absence of fresh bearish news in conjunction with supportive underlying fundamentals, have rekindled buying interest to support prices as well.

 

Meanwhile, Argentine crop estimates continue to shrink, and with planting delays in the Midwest keeping new crop potential uncertain, traders are adding risk premium back into the market, analysts said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at the April high of US$10.64 1/2 a bushel. The next downside price objective is pushing and closing prices below solid chart support at this week's low of US$9.75 1/4 a bushel.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,170,100 metric tonnes for the week ended April 23. Sales for 2008-09 were a net 834,600 metric tonnes, with China the primary buyer of 468,400 tonnes. Analysts had forecast sales between 450,000 and 900,000 million metric tonnes.

 

Soymeal sales were a net 293,100 tonnes, with 2008-09 sales of 293,000 a marketing-year high. Trade estimates ranged from 75,000 to 200,000 tonnes. Soyoil commitments were 36,600 metric tonnes. Analysts had forecast sales between 5,000 and 20,000 tonnes.

 

The U.S. Census Bureau Thursday downwardly revised its March soyoil stocks estimate to 3.058 billion pounds, down from its preliminary estimate of 3.064 billion pounds, according to the Census Bureau's Fats and Oils stocks report. Soyoil consumed for methyl esters-biodiesel was pegged at 82.9 million pounds, down from 140.5 million in February, and down from 230.2 million in March 2008.

 

Meanwhile, with over half of the Argentina soy harvest complete, conditions vary widely with drought damage in much of the early soy and late soy in some areas suffering from early frosts, the Argentina Agriculture Secretariat said in its weekly crop report Wednesday. As of April 23, 66% of the 2008-09 soy crop had been harvested, up 11 percentage points from the same date last year.

 

CBOT soy product futures are seen higher, in unison with soybeans.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange rallied 2% Thursday, tracking a U.S. agricultural price bounce as the market began to shrug off fears the swine flu outbreak would escalate. Crude palm oil futures on Malaysia's derivatives exchange rose by as much as 5.6% Thursday on expectations that steady exports may have drawn down inventories to below March's 20-month low.