June 22, 2006

 

CBOT Soy Outlook on Thursday: Seen higher on supportive crush data

 

 

Higher-than-expected crush data from the Census Bureau is expected to keep Chicago Board of Trade soybean futures consolidating higher early Thursday.

 

Soybeans are called to open 1 to 2 cents higher.

 

The market is poised to consolidate prior declines once again, as supportive crush data from May provide strength to a market lacking in fresh fundamental influences, said a CBOT commission house broker.

 

The U.S. Census Bureau said the May soybean crush was 146.2 million bushels, up from expectations of 144.5 million bushels. Meanwhile soyoil stocks were 2.852 billion pounds, down from the estimate of 2.888 billion. Soymeal stocks were 263,632 short tonnes, significantly lower than the trade estimate of 377,300 short tonnes.

 

In overnight electronic trade, July soybeans were 1-cent higher at US$5.87 1/2, November soybeans were 1/2-cent higher at US$6.13 1/4, July soymeal was US$0.80 higher at US$178.90 and July soyoil was 11 points higher at 24.55 cents per pound.

 

However, the market is seen continuing its sideways theme, struggling with non-threatening weather and the lingering question of how much of a decline in soybean planted acres will the U.S. Department of Agriculture show in its June 30 acreage report.

 

Favorable near term weather conditions are expected to keep a lid on upside movement, with outside inflationary markets offering little direction for prices in early trade, analysts say. Otherwise, the rolling of spreads will be a featured attraction, with traders watching the July US$6.00 strike amid its large open interest ahead of Friday's option expiration, analysts add.

 

Meanwhile, market technicians say futures are still in a choppy trading range on the daily bar chart, and in the lower portion of it. The next upside price objective for July soybeans is closing prices above psychological resistance at US$6.00. A close back below technical support at this month's low of US$5.75 1/2 would give better downside technical momentum.

 

First resistance for July soybeans is seen at US$5.89 - Wednesday's high - and then at US$5.91 1/2--this week's high - and then at US$5.95. First support is seen at US$5.84 1/2 - Wednesday's low - and then at US$5.80.

 

The DTN Meteorlogix Weather Service forecast said scattered thunderstorms will mainly occur in Missouri Thursday, with mainly dry conditions on tap for the western Midwest Friday. Scattered to widely scattered thundershowers will redevelop Friday night and Saturday. This activity may tend to favor the northern and eastern areas. Temperatures will average near to above normal Thursday, near to below normal Friday and Saturday, Meteorlogix said.

 

In the eastern Midwest, episodes of showers and thunderstorms are expected through southern and east-central Illinois, central and southern Indiana, central and southern Ohio Thursday and Friday. Only a few light showers will pop up elsewhere in the region. Dry conditions with only a few light showers are expected Saturday. Temperatures will average near normal north and above normal south today, and near to below normal Friday and Saturday, Meteorlogix said.

 

USDA's weekly export sales data showed soybean sales at 200,100 metric tonnes for old crop and 69,000 tonnes for new-crop. This compares to trader estimates of 100,000 to 400,000 tonnes. Soybean old crop export sales were 39% below the prior 4-week average. New-crop sales were for unknown destinations.

 

Soymeal 2005-06 sales were 87,400 tonnes, while new crop sales totaled 8,000 tonnes. Analysts estimated the sales at 50,000 to 125,000 tonnes. Soyoil sales were 19,000 tonnes, with estimates ranging from zero to 6,000 tonnes. The primary buyer was the Dominican Republic.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday, cash dealers said. Spot cash soybean bids were down 1-cent in Peoria, Ill., and up 1-cent in Evansville, Ind., according to cash sources Thursday.

 

Rotterdam soybeans and soymeal prices were mostly higher. European vegoils were mixed.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled slightly higher in thin trading, following modest gains in overnight Chicago Board of Trade soybean futures. The benchmark September 2006 soybean contract rose RMB1 to settle at RMB2,609 a metric tonne, after trading between RMB2,607/tonne and RMB2,614/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday, boosted by gains in other commodity markets and keen buying interest from a major trading house. The benchmark September CPO contract ended at MYR1,463 a metric tonne, up MYR5 from Wednesday.