June 29, 2006

 

CBOT Soy Outlook on Thursday: Up 2-3 cents on e-CBOT, pre-report positioning

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's open auction session higher, following the overnight theme, with choppy activity expected as traders even up positions ahead of Friday's reports.

 

Soybeans are called to open 2 to 3-cents higher.

 

In overnight electronic trade, July soybeans were 1 1/2-cents higher at US$5.80, November soybeans were 1-cent higher at US$6.06 3/4, while December soymeal was US$0.10 lower at US$172.60 and December soyoil was 2 points lower at 26.27 cents per pound.

 

The overnight theme will lend direction to prices, with solid weekly export sales, concerns over warmer and drier midrange weather forecasts and outlooks for lower acres in Friday's acreage report, providing support to prices, said Don Roose, president U.S. Commodities in West De Moines Iowa.

 

Nevertheless, traders anticipate sideways activity, as the market positions itself in front of Friday's reports, with technical factors directing speculative interest.

 

Technical analysts said while serious near-term chart damage has been inflicted on the soybean market recently, some of that damage has been repaired. The next major downside price objective for November soybeans is closing prices below solid technical support at this week's low of US$5.91. It will take a close back above resistance at Wednesday's high of US$6.10 a bushel to provide some fresh upside technical momentum.

 

First resistance for November soybeans is seen at US$6.10--Wednesday's high--and then at US$6.15. First support is seen at US$6.02--Wednesday's low--and then at US$6.00.

 

The DTN Meteorlogix Weather Service forecast said today's US and European models are in fair to good agreement during the next 5-7 days and fair to good agreement during days 8-10. The differences in the 5-7 day period include a deeper trough over the Great Lakes and northeast USA on the US model as compared to the European model. Both models show the western ridge building northward over the Rockies and western plains during the last part of this period. The difference during the 8-10 day period is that the US model has the central US ridge over the central plains whereas the European model has a slightly weaker ridge centered over the Midwest.

 

If these models forecasts were verified, it would be a dry pattern for much of the US, but especially for the northern plains and western Midwest. This would also provide for a hotter pattern for the north plains the northwest Midwest, Meteorlogix said.

 

U.S. Department of Agriculture's weekly export sales data showed soybean sales at 377,800 metric tonnes for old crop and 155,000 tonnes for new-crop. This compares to trader estimates of 150,000 to 400,000 tonnes. Soybean old crop export sales were 89% above the previous week. New-crop sales were for China and Unknown destinations.

 

Soymeal 2005-06 sales were 109,500 tonnes, while new crop sales totaled 30,900 tonnes. Analysts estimated the sales at 65,000 to 120,000 tonnes. Soyoil sales were a net reduction of 3,200 tonnes, with estimates ranging from zero to 10,000 tonnes.

 

U. S. Census Bureau revised its May soyoil stocks figure, raising the May stocks figure to 2.865 billion pounds from the 2.852 billion pounds originally reported June 22. The figure is up from Aprils stocks of 2,718 billion pounds and well above the 1.889 billion pounds reported at the same time last year.

 

The Kaosiung branch of Taiwan's Breakfast Soybean Procurement Association, or BSPA, is seeking 30,000-60,000 metric tonnes of Brazil or U.S.-origin soybeans for August delivery in a tender Friday, an association official said Thursday.

 

USDA is scheduled to release its acreage and quarterly grain stocks report Friday, 7:30 CDT. The average of analyst's estimates pegs soybean acreage at 75.132 million acres and June 1 stocks at 1.012 billion bushels.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday, cash dealers said. Spot cash soybean bids were down 1-cent in Keokuk, IA, down 3-cent in Evansville, Ind, and down 2-cent in St. Louis, according to cash sources Thursday.

 

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

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Thursday in very quiet trading, with modest gains in Chicago Board of Trade soybean futures lending some support. The benchmark September contract rose RMB2 to settle at RMB2,575 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday as the market drew support from gains in soyoil futures and keen cash market buying from a major trading house. The benchmark September CPO contract ended at MYR1,477 a metric tonne, up MYR10 from Wednesday.