May 24, 2007

 

CBOT Soy Outlook on Thursday: Up 1-3 cents; e-CBOT theme, weather, technicals

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session on firm footing, in line with the overnight trend, as supportive technicals and lingering concerns over dryness in the eastern Midwest remain supportive influences.

 

CBOT soybean futures are called to start the session 1 to 3 cents higher.

 

In overnight e-CBOT trading, July soybeans were 2 3/4 cents higher at US$8.03 1/4 per bushel, and November were 2 cents higher at US$8.32 1/2.

 

The fundamental concern of the effect of dry eastern Midwest crop areas on smaller 2007 soybean acreage coupled with bullish technical momentum is expected to keep sellers on the run, analysts said.

 

A quiet news front with neutral monthly Census Crush and weekly export sales data should keep attention on weather and technicals, with traders keeping a close eye on a rain system moving eastward from the western Midwest, a CBOT floor analyst said.

 

Overnight price strength in soyoil futures amid sharp gains in Malaysian palm oil futures are seen lending price support as well, traders said.

 

However, ample old crop inventories and positioning squaring heading toward an extended holiday weekend may attract profit-taking pressure to limit advances, traders added.

 

A market technician said the bulls still have upside technical momentum on their side. The next upside price objective for July soybeans is closing prices above solid technical resistance at this week's high of US$8.03. The next downside price objective is closing prices below solid support at US$7.80.

 

First resistance for July soybeans is seen at US$8.03 and then at US$8.08 1/2. First support is seen at Wednesday's low of US$7.94 and then at US$7.88.

 

The DTN Meteorlogix Weather Service forecast said rain and thunderstorms in the western Midwest will maintain favorable moisture conditions for emerging and developing crops but there may be some local flooding. In eastern Midwest, there's some chance for needed rainfall in Illinois, Wisconsin and Michigan during the next couple of days but the totals should still be less than in the western Midwest region. Even less rainfall potential for Indiana, Ohio and Kentucky during the period, Meteorlogix reports.

 

The Census Bureau reported soybean crushings in April totaled 144.9 million bushels. The figure was below the average survey estimate of 146.1 million bushels, down from March's 155.7 million and above last year's 135.5 million. Soyoil stocks dropped to 3.294 billion pounds from March's 3.362 billion. The average of survey estimates was 3.314 billion pounds. Soymeal stocks were reported at 328,585 short tonnes. The stock figure was up slightly from March's 328,489 and below the average estimate of 347.3 thousand tonnes.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 2.341 million metric tonnes for the week ended May 17. Included in the total were sales of 2.258 million metric tonnes for the 2007-08 marketing year. The 2007-08 sales were primarily for China with 2.202 million metric tonnes. Analysts had forecast sales between 2.000 and 2.800 million metric tonnes. Soymeal sales were a net 137,000 tonnes, and soyoil commitments were 2,600 metric tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, following Wednesday's gains in CBOT soybeans. The benchmark September 2007 soybean contract settled RMB9 higher at RMB3,249 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply higher Thursday, reaching a nearly nine-year high, amid expectations export data due to be released Friday would be impressive. It was the highest closing level for a benchmark contract since August 1998. Traders said talk of friendly export numbers and bullish technical conditions reinforced already upbeat market sentiment. The benchmark August contract ended at MYR2,445 a tonne, up MYR56 from Wednesday.