May 9, 2007

 

CBOT Soy Outlook on Wednesday: 2-3 cents higher on position squaring

 

 

Chicago Board of Trade soybean futures are forecast to begin trading 2-to-3 cents higher Wednesday as ideas recent weakness was overdone and due for a correction expected to support prices.

 

In overnight e-CBOT trading, July soybeans gained 3 1/2 cents to US$7.43 per bushel, August rose 4 1/4 cents to US$7.51 and November gained 2 1/4 cents to US$7.71. E-CBOT volume in July was 1,104 contracts.

 

Soybeans followed the decline in corn Tuesday and are due for a bounce ahead of the USDA supply and demand reports due out on Friday, a floor analyst said. In addition there are still a lot soybeans left to plant and that remains dependent on the weather, he said.

 

The average of fifteen analysts surveyed estimates 2006-07 soybean ending stocks at 607 million bushels, slightly lower than the 615 million bushels forecast by the USDA in April.

 

The average of fourteen analysts surveyed estimates 2007-08 soybean ending stocks at 337 million bushels.

 

In the western U.S. Midwest mainly dry weather is expected through Friday with temperatures averaging above normal, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, mainly dry weather is expected Thursday and Friday, with temperatures averaging above normal.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal west and near-to-below normal east, with rainfall near-to-above normal west and near-to-below east, Meteorologix Weather said.

 

On day session open auction technical charts, July soybeans closed nearer the session low on spillover from corn, a technical analyst said. The next downside objective is closing prices below solid support at the April low of US$7.25 1/2.

 

First resistance for July is seen at US$7.47 and then at US$7.51, with first support at US$7.35, Tuesday's low and then at US$7.34.

 

Deliveries posted against the May future were again 1,144 contracts. Large issuers included the customer account of Man Professional Clearing which issued 498 contracts and the customer account of Combs, a division of Cunningham, which issued 224 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 504 contracts, and the customer account of RJ O'Brien, which stopped 199 contracts. The last trade assigned was May 8.

 

In overseas markets, palm oil futures settled higher on speculative buying with benchmark July up MYR51 at MYR2,289 per metric tonne.

 

Soybean futures on China's Dalian Commodities Exchange settled higher in anticipation of Friday's USDA reports, a trader said. The benchmark September contract was up RMB28 at RMB3,142 per metric tonne.

 

A group of Philippine millers and livestock producers bought 42,000 short tonnes of Argentinean soybean meal, industry sources said.