May 15, 2008

 

CBOT Soy Outlook on Thursday: Down 5-10 cents; consolidate, lacks fresh news

 

 

Soybean futures on the Chicago Board of Trade are poised for a lower start to Thursday's day session, taking its cue from the overnight theme amid a lack of fresh supportive news.

 

CBOT soybean futures are called to start the session 5 to 10 cents lower. In overnight electronic trading, July soybeans were 11 3/4 cents lower at $13.67 3/4, November soybeans were 8 1/2 cents lower at $13.24 1/2. July soyoil was 26 points lower at 61.24 cents per pound and July soymeal was $3.00 lower $348.70 per short tonne.

 

The absence of fresh supportive inputs to keep buyers enthused has left the market's upside momentum looking a little tired, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Weekly export sales failed to produce any surprises, and the market is running out of bullish things to talk about, Scoville added.

 

Consolidative action is anticipated as the market continues to hover within wide sideways trading range, awaiting updates on the Argentina strike situation, and clarity on eventual 2008 soybean acreage, analysts said.

 

Traders will take a cautious approach as they await news out of Argentina on Thursday, where the farmers' strike against a controversial export tax was originally scheduled to end, a CBOT floor analyst said. However, some farmers are threatening to extend the strike through next week and that should keep futures on edge, he added.

 

A technical analyst said the next downside price objective for July soybeans is pushing and closing prices below solid technical support at $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 $14.00 a bushel.

 

First support for July soybeans is seen at Wednesday's low of $13.68 and then at $13.50. First resistance is seen at Wednesday's high of $13.87 and then at $14.00.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were 201,700 metric tonnes. 2007-08 sales totaled 201,400 tonnes or 7.4 million bushels for the week ended May 8. Analysts had forecast sales between 75,000 and 250,000 metric tonnes. The 2007-08 sales were primarily for China with 65,800 metric tonnes, and Indonesia with 49,900 tonnes.

 

Soymeal sales were a net 116,800 tonnes, within trade estimates of 50,000 to 150,000 tonnes. Soyoil commitments were 10,800 metric tonnes, just above trade estimates of 5,000 to 10,000 tonnes.

 

Meanwhile, U.S. Department of Agriculture announced Thursday private export sales of 126,000 metric tonnes of U.S. soybeans for delivery to China. Of that total, 60,000 tonnes are for delivery in the 2007-08 marketing year and 66,000 tonnes are for delivery in the 2008-09 marketing year.

 

In other news, China imported 300,000 metric tonnes of soyoil in April, up 40.5% from a year earlier, according to preliminary data issued by the General Administration of Customs Thursday. The country imported 1.02 million tonnes of soyoil in the first four months, up 28.3% on year, it said.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Thursday as traders took profit on gains posted over the previous nine consecutive sessions. The benchmark January 2009 soybean contract settled RMB41 lower at RMB4,464 a metric tonne, or down 0.91%, after trading between RMB4,428-4,498/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange closed lower Thursday on profit-taking in thin trade amid lower soyoil and crude oil prices Wednesday, trade participants said. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR37 lower at MYR3,521/tonne.