August 1, 2007

 

CBOT Soy Outlook on Wednesday: Up 2-4 cents; adding premium, weather eyed

 

 

Chicago Board of Trade soybean futures are poised to start Wednesday's day session higher, as the market continues add risk premium back in the market as weather is keyed on during the crops critical pod fill stage.

 

CBOT soybean futures are called to start the session 2 to 4 cents higher.

 

In overnight e-CBOT trading, August soybeans were 2 1/2 cents higher at US$8.36 1/2 per bushel, and November was 4 1/4 cents higher at US$8.61 3/4.

 

The market is gradually adding weather premium to prices, as concerns over the effect of hot, dry weather on soybeans with 50% of the U.S. crop still not reaching their full yield development timeframe an underpinning theme, analysts said.

 

Technical buying is seen aiding the supportive tone, with the ability of futures to break out of a one-week trading range providing bullish traders with confidence that the market is set to repair some technical damage, analysts added.

 

Otherwise, a quiet news front will keep attention on weather forecasts, as tightening new crop inventory forecasts place increased importance on every bushel of 2007 production, a CBOT floor analyst said.

 

A technical analyst said prices Tuesday did see a bullish upside breakout from a recent sideways trading range on the daily bar chart. The next downside price objective for November soybeans is closing prices below solid support at last week's low of US$8.34. The next upside price objective is closing prices above solid technical resistance at US$8.69 1/2, which would fill on the upside a downside price gap on the daily bar chart.

 

First resistance for November soybeans is seen at Tuesday's high of US$8.62 1/2 and then at US$8.69 1/2. First support is seen at Tuesday's low of US$8.49 1/2 and

 

The DTN Meteorlogix Weather Service forecast said a little more rain is in the outlook for the western Midwest during the period Saturday-Tuesday with amounts raised from 0.25-0.75 inch to 0.25-1.00 inch. Scattered showers and thunderstorms expected in the eastern Midwest over the weekend into early next week appear to be located further to the north than was indicated Tuesday with amounts of 0.25-0.75 inch favoring the Great Lakes region.

 

Meanwhile, high temperatures in the upper 80s to middle 90s Fahrenheit along with only limited rainfall during the next 6-10 days will deplete soil moisture and cause some increase in stress to filling corn and soybeans. In the eastern Midwest, high temperatures in the upper 80s to middle 90s F, with only limited rainfall during the next 6-10 days will deplete soil moisture and increase stress to filling corn and soybeans.

 

The U.S. Department of Agriculture announced Wednesday private exporters reported the sale of 165,000 metric tonnes of soybeans for delivery to unknown destinations in the 2007-08 marketing year.

 

Deliveries notices posted against August soybean futures totaled 2,220 lots. A customer account at Tenco issued 605 lots, with a customer account at Man Professional Clearing a featured stopper of 823 lots. The last trade date assigned was July 31.

 

In other news, Taiwan plans to halve its import tariffs on wheat, corn and soybeans for six months, as part of the government's measures to ease inflationary pressure, the Cabinet said in a statement Wednesday.

 

In overseas markets, crude palm oil futures on Bursa Malaysia Derivatives ended lower Wednesday amid continued profit-taking following a recent rally and selling pressure on the cash market. The benchmark October contract ended at MYR2,585 a metric tonne, down MYR23 from Tuesday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday, tracking Tuesday's CBOT gains. The benchmark January 2008 soybean contract settled RMB40 higher at RMB3,429 a metric tonne.