July 13, 2007

 

CBOT Soy Outlook on Friday: Steady up 2 cents; e-CBOT, eyeing weather

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session steady to firmer, taking its cue from overnight action, as the market continues to build risk premium in the market, analysts said.

 

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

 

In overnight e-CBOT trading, July soybeans were 3 3/4 cents lower at US$9.06 1/4 per bushel, and November was 1 3/4-cent higher at US$9.43 1/4.

 

The market is poised to edge higher on follow through strength from new contract highs set overnight, with weather the key focus of the market, analysts said.

 

The market is expected to attempt to build weather premium, but with forecasts unchanged from Thursday, traders may await midday weather forecasts before committing to extending highs, said Don Roose, president US Commodities in West Des Moines, Iowa.

 

"With soybeans on this type of run at contract highs, any change in weather forecasts could quickly alter price direction," Roose added.

 

Nevertheless, bullish technical momentum, underlying concerns surrounding the tightening new crop balance sheet and solid demand outlooks remain underpinning features, traders said.

 

A market technician said 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$9.05 1/2.

 

First resistance for November soybeans is seen at Thursday's contract high of US$9.42 and then at US$9.50. First support is seen at US$9.30 and then at Thursday's low of US$9.23.

 

The DTN Meteorlogix Weather Service forecast said soybeans in the western Midwest will benefit from temperatures at near to below normal levels during the next few days. However, warmer to hotter temperatures and little rainfall will deplete soil moisture and increase stress to crops next week.

 

In the eastern Midwest, soybeans will benefit from temperatures at near to below normal levels during the next few days. Soils will trend drier as temperatures trend somewhat hotter and rainfall chances diminish next week, Meteorlogix said.

 

Deliveries notices posted against July soybean futures totaled 1,528 lots. A customer account at Man Professional Clearing issued 551 lots, while the house account at Term Commodities stopped 366 lots. The last trade date assigned was July 12.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended a tad higher Friday after a choppy, uneventful trading day as the market struggled for direction amid an absence of fresh leads. The benchmark September contract ended at MYR2,623 a metric tonne, up MYR8 from Thursday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, following a new high set at CBOT Thursday. The benchmark January 2008 soybean contract settled RMB19 higher at RMB3,387 a metric tonne.

 

Meanwhile, cash soybean prices in China's major producing regions were slightly lower in the week to Friday on ample supply.