May 10, 2007

 

CBOT Soy Outlook on Thursday: 1/2-1 cent higher ahead of Friday's USDA reports

 

 

Chicago Board of Trade soybean futures are expected to start trading 1/2-to-1c higher Thursday in the absence of fresh news and ahead of Friday's U.S. Department of Agriculture's supply and demand reports, analysts said.

 

In overnight e-CBOT trading, July soybeans rose 1/2 cent to US$7.48 per bushel, August gained 1/4 cent to US$7.54 1/4 and November finished unchanged at US$7.77 1/4. E-CBOT volume in July was 972 contracts.

 

The market should see some position squaring ahead of the USDA reports as there was little fresh news out overnight to influence price direction, a commission house analyst said.

 

The average of fifteen analysts surveyed by Dow Jones 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.

 

Weekly soybean export sales were below analyst estimates and were "poor" a floor trader said.

 

The USDA reported soybean export sales were 204,200 metric tonnes for the week ended May 3. China was the largest buyer on the week at 116,100 metric tonnes.

 

In the western U.S. Midwest mainly dry weather is forecast for Friday with dry weather or only a few light showers expected on Saturday, DTN Meteorologix Weather said. Temperatures are expected to average above normal Friday and near-to-above normal Saturday.

 

In the eastern U.S. Midwest, there is a chance for scattered light showers in southern areas on Friday with dry weather or only a few light showers possible Saturday, Meteorologix Weather said. Temperatures are expected to average above normal Friday and near-to-above normal Saturday.

 

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 high on ideas that farmers will be able to plant all of the corn acres they intended to plant, limiting ideas of expanded bean acres, a technical analyst said. However, a 2 1/2 month downtrend line remains in place on the daily bar chart. Soybean bulls would regain upside technical momentum by closing prices above last week's high of US$7.58 1/2, the analyst said.

 

First resistance for July is seen at US$7.51 and then at US$7.55, with first support at US$7.43 1/2, Tuesday's low and then at US$7.40.

 

Deliveries posted against the May future were 934 contracts. Large issuers included the customer account of Man Professional Clearing which issued 504 contracts and the customer account of Combs, a division of Cunningham, which issued 248 contracts. Large stoppers included the customer account of RJ O'Brien, which stopped 293 contracts, and the customer account of Man Professional Clearing, which stopped 322 contracts. The last trade assigned was May 9. Preliminary open interest in May was 1,370 contracts.

 

In overseas markets, palm oil futures settled higher with benchmark July up MYR31 at MYR2,320 per metric tonne.

 

Soybean futures on China's Dalian Commodities Exchange settled mostly higher The benchmark September contract ended up RMB3 at RMB3,145 per metric tonne.