June 12, 2008

 

CBOT Soy Outlook on Thursday: Down 10-15 cents on profit-taking, outside marktes

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session on the defensive, pulling back from Wednesday's limit gains on profit-taking pressure.

 

CBOT soybean futures are called to start the session 10 to 15 cents lower.

 

In overnight electronic trading, July soybeans were 10 cents lower at US$15.06 1/2 and November soybeans were 23 3/4 cents lower at US$14.85 1/4. July soyoil was 37 points lower at 64.63 cents per pound and July soymeal was US$5.00 lower at US$393.50 per short tonne.

 

Ideas that Wednesday's price spike was overdone, coupled with bearish influences from outside markets, are seen attracting speculative selling to weigh on futures, analysts said.

 

Sharp declines in crude oil and precious metal futures in conjunction with strength in the U.S. dollar are serving as catalysts for the initial declines.

 

A lack of follow-through buying in overnight trade and speculation that the Midwest weather issues are adequately factored into prices in the near term opens the door for traders to book some profits, as the trade remains on pins and needles until plantings are completed, a CBOT floor analyst added.

 

The DTN Meteorlogix weather forecast said a deepening trough over the eastern U.S. early in the 6 to 10 day period may mean that the eastern Midwest will be drier and cooler during this period. However, in the western Midwest it could still be wet as the warm air in the plains clashes with the cool air over the eastern Midwest, Meteorlogix said.

 

A market technician said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at the contract high of US$15.95 3/4 a bushel. The next downside price objective is pushing and closing prices below solid support at US$14.50.

 

First resistance for July soybeans is seen at US$15.25 and then at US$15.50. First support is seen at US$15.00 and then at US$14.89 1/2.

 

Soybean futures will trade with expanded US$1.05 trading limits Thursday following Wednesday's 70 cent limit-up closes.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were 300,600 metric tonnes. 2007-08 sales totaled 272,000 tonnes for the week ended June 5. Analysts had forecast sales between 300,000 and 500,000 metric tonnes. The sales were primarily for China with 80,200 metric tonnes.

 

Soymeal sales were a net 238,000 tonnes, above trade estimates of 100,000 to 200,000 tonnes. Soyoil commitments were 15,100 metric tonnes, above trade estimates of 5,000 to 10,000 tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply higher Thursday following Wednesday's surge in CBOT soybean futures. The benchmark January 2009 soybean contract settled 3.2% higher at RMB5,007 a metric tonne, after trading between RMB4,950/tonne and RMB5,080/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended marginally up but off highs Thursday as investors took profits after subdued demand in the cash market damped sentiment. The benchmark August contract on the Bursa Malaysia Derivatives ended MYR17 higher at MYR3,623 a metric tonne, off an intraday high of MYR3,691/tonne.