July 5, 2007

 

CBOT Soy Outlook on Thursday: Up 10-12 cents; retracing Tuesday's setback

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session on firm footing, following the overnight theme, as the market retraces Tuesday's profit taking setback.

 

CBOT soybean futures are called to start the session 10 to 12 cents higher.

 

In overnight e-CBOT trading, July soybeans were 11 1/2 cents higher at US$8.62 per bushel, and November was 11 3/4 cents higher at US$8.94.

 

Bullish sentiment remains a driver of prices, with recent rains not as extensive as expected during the past two days, and warm, drier conditions expected through the weekend rekindling buying interest after the holiday break, analysts said.

 

Technically, the market remains well supported, and with the need to buy 2008 acres as well as rationing new crop demand, futures remain firmly underpinned, analysts added.

 

Otherwise, a quiet news front is providing little direction, with traders saying there is potential for volatile trade, with some participants taking time off after the July 4th holiday and the critical development stage for soybean crops still weeks away, a CBOT floor analyst said.

 

A technical analyst said market bulls still have the strong technical advantage, with the next upside price objective for November soybeans closing prices above solid technical resistance at the contract high of US$9.03 1/2. The next downside price objective is closing prices below solid support at US$8.43 1/2, which would fill on the downside the big upside price gap on the daily bar chart that was created last week.

 

First resistance for November soybeans is seen at Tuesday's high of US$8.92 1/2 and then at US$9.03 1/2. First support is seen at Tuesday's low of US$8.80 1/2 and then at US$8.75.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest Thursday through Saturday. Temperatures will average near to above normal Thursday and Friday, above normal Saturday. Highs Saturday should range from the low to the middle 90s Fahrenheit. Mainly dry weather is seen for Sunday, with a chance for scattered showers and thundershowers Monday and Tuesday. Temperatures should be in the low to middle 90s again Sunday but they should be cooler Monday and Tuesday.

 

In the eastern Midwest, Showers may linger near or just south of the Ohio River early Thursday. Mainly dry conditions are in store for Friday and Saturday. Temperatures will average near normal Thursday and Friday, and near to above normal Saturday. Mainly dry conditions are seen for Sunday, with a chance for scattered showers and thundershowers Monday and Tuesday. Temperatures will average above normal Sunday and Monday with highs in the low to middle 90s F. It should be cooler Tuesday, Meteorlogix reports.

 

Deliveries notices posted against July soybean futures totaled 2,975 lots. A customer account at Man Professional Clearing issued 691 lots, and stopped 878 lots. The last trade date assigned was July 3.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday, supported by strong after-hours trading of soyoil futures and crude oil gains. The benchmark September contract ended at MYR2,482 a metric tonne, up MYR3 from Wednesday.

 

On Singapore's Joint Asian Derivatives Exchange, CPO futures were slightly higher, with September up US$1 at US$723.50/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday in a quiet session, as traders awaited more guidance from CBOT. The benchmark January 2008 soybean contract settled RMB16 higher at RMB3,295 a metric tonne.