May 14, 2008

 

CBOT Soy Outlook on Wednesday: Down 2-3 cents, minor correction, overdone gains

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session slightly lower, down in unison with overnight price action amid selling interest on ideas Tuesday's late gains were overdone, analysts said.

 

CBOT soybean futures are called to start the session 2 to 3 cents lower. In overnight electronic trading, July soybeans were 1 1/2 cents lower at US$13.78, November soybeans were 1 1/2 cents lower at US$13.24 1/4. July soyoil was unchanged at 62.10 cents per pound and July soymeal was US$2.70 lower US$347.50 per short tonne.

 

Tuesday's late session spike was a bit overdone, and should illicit some profit taking pressure, analysts added.

 

A firmer U.S. dollar and weakness in crude oil is expected to add to the lower tone, with a lower-than-expected monthly crush figure taking some edge off prices as well, a CBOT floor broker said.

 

However, tight projected old and new crop ending inventories, ideas Argentina's farmers strike will expanded beyond Thursday, and supportive outlooks for acreage as improved planting opportunities for corn in the Midwest limit the risk of producers shifting corn acres to soybeans limits downside moves, traders added.

 

A technical analyst said the direction in which prices break out of the current trading range is likely to be the next significant trend in prices. The next downside price objective for July soybeans is pushing and closing prices below solid technical support at US$13.20, which would fill on the downside an upside price gap. The next upside price objective is to push and close prices above solid technical resistance at US$14.00 a bushel.

 

First support for July soybeans is seen at US$13.65 and then at US$13.50. First resistance is seen at Tuesday's high of US$13.82 and then at US$14.00.

 

The National Oilseed Processors Association said 139.966 million bushels of soybeans were crushed in April, down 8.199 million bushels from March's crush level, and lower than the average analyst estimate of 142.6 million bushels. Pre-report estimates for the crush ranged from 141.0 million to 143.5 million bushels. NOPA said soyoil yield was 11.66 pounds per bushel, just above the 11.65 recorded in March. Soyoil stocks were 2.409 billion pounds, down from last month's 2.529 billion.

 

In deliveries, May soybean deliveries totaled 333 lots. The house account at Term Commodities issued 40 lots, and the ADM Investor Services issued 2 lots. A customer account at Banc of America Securities stopped 325 lots. The last trade date assigned was May 12.

 

In other news, Egypt's state-owned Food Industries Holding Co. bought 25,000 metric tonnes of soybean oil in a tender, traders said Wednesday. The oil is for shipment during the second half of June, he said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, along with a sharp rise on CBOT overnight. The benchmark January 2009 soybean contract settled RMB44 higher at RMB4,505 a metric tonne after trading between RMB4,472-RMB4,542/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange closed higher Wednesday as investors took cues from rising soyoil prices and Malaysia's offer to barter palm oil with rice-supplying countries, trade participants said. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR26 higher at MYR3,558/tonne, off an intraday high of MYR3,612.