May 22, 2008

 

CBOT Soy Outlook on Thursday: Up 10-12 cents on overnight theme, demand

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session higher, following the overnight theme, buoyed by strength from crude oil futures and supportive crush and weekly export sales data.

 

CBOT soybean futures are called to start the session 10 to 12 cents higher. In overnight electronic trading, July soybeans were 13 1/4 cents higher at US$13.62 1/4, November soybeans were 11 1/2 cents higher at US$13.66 1/2. July soyoil was 24 points higher at 63.49 cents per pound and July soymeal was US$3.00 higher US$335.50 per short tonne.

 

The market is poised to climb in early action, with continued support from record high crude oil prices and solid underlying demand attributed to higher-than-expected crush and export sales data providing support, analysts said.

 

Lingering uncertainty amid unsettled issues between the Argentina government and farmers are expected to keep some premium in the market as is lingering concerns about final U.S. soy plantings, analysts added.

 

A technical analyst said the next downside price objective for July soybeans is pushing and closing prices below solid technical support at US$13.11. The next upside price objective is to push and close prices above solid technical resistance at US$13.66 a bushel, which would fill on the upside this week's downside price gap on the daily chart.

 

First support for July soybeans is seen at Wednesday's low of US$13.32 and then at this week's low of US$13.21 1/2. First resistance is seen at Wednesday's high of US$13.58 and then at this week's high of US$13.77 1/4.

 

The U.S. Census Bureau pegged the April crush at 149.2 million bushels, down from the March crush figure of 155.96 million bushels. In a survey of analysts, the average of estimates was 146.0 million bushels. April soymeal stocks were reported at 342,928 short tonnes, down from the 395,427 tonnes in March, as well as below the average of estimates at 350,000. Soyoil stocks came in at 3.015 billion pounds, down from March stocks of 3.075 billion, but above the average estimate of 2.755 billion pounds.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were 869,300 metric tonnes. 2007-08 sales totaled 382,800 tonnes or 14.1 million bushels for the week ended May 15. 2008-09 sales totaled 486,500 tonnes. Analysts had forecast sales between 175,000 and 450,000 metric tonnes. The 2007-08 sales were primarily for China with 194,100 metric tonnes, and Japan with 101,600 tonnes. The 2008-09 sales were primarily for China with 429,000 metric tonnes.

 

Soymeal sales were a net 158,200 tonnes, within trade estimates of 75,000 to 125,000 tonnes. Soyoil commitments were 46,400 metric tonnes, above trade estimates of 5,000 to 25,000 tonnes.

 

Argentine Cabinet Chief Alberto Fernandez said Wednesday that key negotiations with farm leaders will be held Thursday evening, a day after farmers ended a nationwide strike protesting a grain export tax hike. The Thursday meeting is expected to begin between 5:30 p.m. and 6 p.m. local time (2030-2100 GMT), reports said.

 

In overseas markets, China's soybean oil futures traded on the Dalian Commodity Exchange settled sharply higher Thursday, buoyed by crude oil prices hitting a new record. The gain in soy oil also helped support soybean prices. The benchmark September 2008 soy oil contract settled RMB274 higher at RMB11,290 a metric tonne, up 2.5%. The benchmark January 2009 soybean contract settled RMB71 higher at RMB4,528/tonne, up 1.6%.

 

Crude palm oil futures on Malaysia's derivatives exchange hit a five-week high Thursday, ending above MYR3,600 a metric tonne for the first time this month on strong buying amid record high crude oil, higher soybean oil and a bullish price outlook, said trade participants. The benchmark August CPO contract on the Bursa Malaysia Derivatives ended MYR53 higher at MYR3,610/tonne after reaching a high of MYR3,645/tonne.