July 10, 2007

 

CBOT Soy Outlook on Tuesday: Up 1-2 cents, bullish outlooks, tech momentum

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session modestly higher, underpinned by technical momentum and bullish fundamental outlooks.

 

CBOT soybean futures are called to start the session 1 to 2 cents higher.

 

In overnight e-CBOT trading, July soybeans were 1 1/2-cent lower at US$8.68 1/2 per bushel, and November was 3/4-cent higher at US$9.02 3/4.

 

The market is poised for a slightly firmer start, taking its cue for overnight trade, with lingering concerns over tightening new crop supplies and technical strength underpinning features, analysts said.

 

The uncertainty of longer range weather forecasts with soybeans still weeks away from their critical growth stage and anticipation of a bullish supply and demand report Thursday is seen holding sellers at bay, analysts added.

 

A technical analyst said market bulls have a strong technical advantage and are looking for more on the upside in the near term. The next upside price objective for November soybeans is closing prices above solid technical resistance at US$9.50. The next downside price objective is closing prices below solid support at US$8.75, which is the top of a gap area on the daily bar chart.

 

First resistance for November soybeans is seen at Monday's contract high of US$9.05 1/2 and then at US$9.10. First support is seen at Monday's low of US$8.89 1/2 and then at US$8.81.

 

U.S. Department of Agriculture in its crop progress report Monday said U.S. soybeans in good-to-excellent condition declined by 3 percentage points to 65% from last week's 68%. Analysts had predicted a condition ratings decline of 1-3 percentage points.

 

Illinois soybean crops gained three percentage points with a 76% good-to-excellent condition and Iowa dropped four percentage points with 72% of the crop in good-to-excellent condition. Ohio crop ratings advanced 1 percentage point to 45% good-to-excellent, and Minnesota conditions dropped eight percentage points, with 65% of the crop in good-to-excellent condition.

 

Forty percent of the crop was reported blooming, up from 19% last week, 36% last year and 28% for the five-year average.

 

The DTN Meteorlogix Weather Service forecast said isolated afternoon thundershowers will favor eastern and southern areas of the western Midwest Tuesday. Mainly dry conditions are on tap for Wednesday, with a chance for sprinkles and a few light showers Thursday. Temperatures will average near to below normal Tuesday, below normal Wednesday and Thursday. Dry conditions, or with only a few light showers, are forecast for Friday and Saturday.

 

In the eastern Midwest, episodes of scattered showers and thundershowers are seen for Tuesday through Thursday. Rainfall should average 0.25-1.00 inch and locally heavier. The heaviest of this activity may occur in the southern and eastern areas. Temperatures will average near to above normal Tuesday, and below normal Wednesday and Thursday, Meteorlogix forecasts.

 

Deliveries notices posted against July soybean futures totaled 2,833 lots. A customer account at Man Professional Clearing issued 1,128 lots, and stopped 1,119 lots. The last trade date assigned was July 9.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended higher Tuesday as concerns about persistently weak production overshadowed bearish data such as declining exports. The benchmark September contract ended at MYR2,530 a metric tonne, up MYR21 from Monday.

 

On Singapore's Joint Asian Derivatives Exchange, the September CPO futures contract was unchanged at US$736/tonne. Total traded volume remained thin at 29 lots.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday on sluggish soymeal demand. The benchmark January 2008 soybean contract settled unchanged at RMB3,279 a metric tonne.