May 1, 2008

 

CBOT Soy Outlook on Thursday: Up 4-6 cents, market uncertainties underpin

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session slightly firmer, underpinned by market uncertainties surrounding Argentina and 2008 acreage.

 

CBOT soybean futures are called to start the session 4 to 6 cents higher.

 

In overnight electronic trading, July soybeans were 6 1/4 cents higher at US$13.20 1/4, November soybeans were 6 1/2 cents higher at US$12.32. July soyoil was 2 points higher at 58.35 cents per pound and July soymeal was US$2.20 higher US$344.40 per short tonne.

 

The uncertainties of the market should keep a floor beneath prices, but cautious activity may promote a choppy tone in the absence of fresh market moving news, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

However, Argentina's strike situation is a little less threatening, and with a lot of world participants on holiday Thursday, futures could test both sides of unchanged as the market awaits fresh clues for future direction, analysts added.

 

Adjustments in the corn/soybean spread relationship is anticipated as corn continues to maintain a favorable advantage in the spread ratio, and soybeans need to gain ground to not lose additional acres to corn with the potential planting opportunities in the Midwest next week, traders said.

 

Otherwise, technically inspired buying and selling will dominate price action, with traders eyeing developments in Argentina and outside markets, traders added.

 

A technical analyst said the next downside price objective for July soybeans is pushing and closing prices below solid technical support at this week's low of US$12.80. The next upside price objective is to push and close prices above solid technical resistance at this week's high of US$13.57 a bushel.

 

First resistance for July soybeans is seen at US$13.30 and then at Wednesday's high of US$13.50. First support is seen at US$13.00 and then at US$12.80.

 

Meanwhile, Argentina's farmers and the government came to a partial accord Wednesday in talks to avoid a repeat of March's crippling farm strike, but farmers left empty handed on the key issue of grain export taxes and will decide over the next days whether the strike will resume Friday.

 

An accord was reached to open up wheat and beef exports again, but the export tax on grains wasn't discussed, farm leaders told reporters after concluding talks with Cabinet chief Alberto Fernandez. The next meeting between the Government and farmers was set for Tuesday.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were 375,600 metric tonnes. 2007-08 sales totaled 310,900 tonnes or 11.4 million bushels for the week ended April 24. Analysts had forecast sales between 200,000 and 450,000 metric tonnes. The sales were primarily for the Netherlands with 125,100 metric tonnes, Mexico with 89,200 tonnes, and China with 63,500 tonnes.

 

Soymeal sales were a net 114,800 tonnes, within trade estimates of 100,000 to 200,000 tonnes. Soyoil commitments were 8,900 metric tonnes, above trade estimates of 5,000 to 15,000 tonnes.

 

The U.S. Census Bureau downwardly revised its March soyoil stocks data Thursday, pegging stocks at 2.897 billion pounds. This is down from the 2.910 billion previously revised preliminary estimate reported April 24.

 

In deliveries, May soybean deliveries totaled 186 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was April 17.

 

Asian soy and palm oil futures were closed overnight in observance of the Labor Day holiday.