June 7, 2007

 

CBOT Soy Outlook on Thursday: Down 2-4 cents; following e-CBOT, techical signals

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session weaker, following the overnight theme, with carryover technical selling featured.

 

CBOT soybean futures are called to start the session 2 to 4 cents lower.

 

In overnight e-CBOT trading, July soybeans were 3 cents lower at US$8.19 1/4 per bushel, and November was 4 cents lower at US$8.49 1/2.

 

Wednesday's bearish technical signals are expected to generate consolidation pressure, with position evening ahead of Monday's supply and demand reports adding to the declines, analysts said.

 

A quiet news front is expected to keep technical factors in play, but with supportive long range fundamentals and uncertainties tied to eastern Midwest weather, downside pressure is seen limited, analysts added.

 

Nevertheless, traders said the market remains vulnerable to additional liquidation pressure with the rolling of July positions expected to keep spreads active over the next few days, a CBOT floor analyst said.

 

A technical analyst said Wednesday's price action scored a bearish outside day down on the daily bar chart, and if there is good follow-through selling pressure on Thursday, then a bearish key reversal down on the daily bar chart would be confirmed. That would be one early clue that a near-term market top is in place. But right now the bulls still have some upside momentum. The next upside price objective for July soybeans is closing prices above solid technical resistance at the contract high of US$8.31. The next downside price objective is closing prices below solid support at US$8.00.

 

First resistance for July soybeans is seen at US$8.25 and then at US$8.31. First support is seen at Wednesday's low of US$8.16 and then at US$8.10.

 

The DTN Meteorlogix Weather Service forecast said showers and thunderstorms will maintain favorable moisture conditions for emerging and developing crops in the western Midwest. In the eastern belt, hotter, drier weather today increases stress to early developing crops but it is not expected to last beyond today. Long range charts suggest a drier, warmer weather pattern for this area, Meteorlogix forecasts.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 225,200 metric tonnes for the week ended May 31. Included in the total were sales of 200,200 metric tonnes for the 2006-07 marketing year. The primary buyer was Cuba with 72,000 metric tonnes. Analysts had forecast sales between 150,000 and 450,000 metric tonnes. Soymeal sales were a net 128,300 tonnes, and soyoil commitments were 2,500 metric tonnes.

 

The U.S. Census Bureau revised its April soyoil stocks figure, lowering the April stocks figure to 3.287 billion pounds from the 3.294 reported May 24. The figure is down from March's stocks of 3.361 billion pounds and well above the 2.755 billion pounds reported at the same time last year.

 

In overseas markets, Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher Thursday after volatile trade as market participants bided their time ahead of the release of important supply and demand data. The benchmark August CPO contract on BMD ended up MYR25 at MYR2,645 a metric tonne.

 

On the Singapore-based Joint Asian Derivatives Exchange, CPO futures were unchanged on extremely thin volumes as trading interest remained weak. A total 93 lots were traded compared with 78 lots Wednesday. The September CPO contract ended flat at US$750/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Thursday following Wednesday's losses at CBOT. The benchmark January 2008 soybean contract settled RMB20 lower at RMB3,354 a metric tonne.