August 10, 2006
CBOT Soy Outlook on Thursday: Flat-down 2 cents; e-CBOT, favorable conditions
Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session steady to weaker, following the overnight theme, with favorable Midwest weather applying mild pressure to prices.
Soybeans are called to open steady to down 2 cents.
In e-CBOT trade, November soybeans were 1 1/2-cent lower at US$5.78 1/2 per bushel.
Scattered rains moving through the Midwest are providing favorable conditions for pod filling soybean crops, and with fundamentals remaining bearish, downside pressure continues, analysts said.
However, traders anticipate a quiet, choppy session with trade positioning ahead of Friday's key production and supply and demand reports. It's tough to pull buyers off the sidelines in the absence of bullish inputs but a supportive weekly export sales figure does provide hope that prices have sank to levels that is attracting demand to help draw down abundant nearby supplies, said a CBOT commission broker.
Meanwhile, technical analysts said serious near-term chart damage has been inflicted this week, with the next downside price objective is solid technical support at this week's low of US$5.73 1/2 basis November futures. It will take a close above technical resistance at US$5.94 - meaning filling this week's big downside price gap on the daily bar chart - to provide fresh upside technical momentum.
First resistance for November soybeans is seen at US$5.82 3/4 and then at US$5.86 1/2 - this week's high. First support is seen at US$5.76 1/2 - Wednesday's low - and then at US$5.73 1/2.
The DTN Meteorlogix forecast said US and European models are in good agreement Thursday. No major changes to the pattern during the next seven days with the jet stream over southern Canada and the northern U.S. continuing to allow for episodes of scattered showers and thunderstorms in the Midwest.
U.S. Department of Agriculture said weekly export sales for soybeans were 541,100 metric tonnes, versus trade estimates of 200,000 to 400,000 tonnes. 2005-06 sales totaled 274,600 tonnes, 55% above the week earlier and 18% over the prior 4-week average. The principle buyers were Taiwan, Netherlands and China. 2006-07 sales totaled 266,500 metric tonnes. Soymeal old and new crop sales were 113,200 tonnes, compared to estimates of 75,000 to 150,000 tonnes. Soyoil sales were 9,100 tonnes, while the trade guess was zero to 10,000 tonnes.
On tap for Friday, USDA is scheduled to release its crop production, supply and demand reports 7:30 a.m. CDT. The average of trade estimates pegs 2006 soybean production at 3.020 billion bushels from a range of estimates than span from 2.909 billion to 3.105 billion. The average of yield estimates was 40.8 bushels per acre from a range of 39.3 to 42.0 bushels per acre. USDA is scheduled to release its August crop report Friday 7:30 a.m. CDT.
In deliveries, a total of 1,174 delivery notices recirculated against the August soybean future. The last trade date assigned was Aug. 9. 69 delivery notices recirculated against the August soymeal contract. The house account at Bunge Chicago stopped all 69 lots. The trade date assigned was Aug. 7. One hundred and ten delivery notices were posted against August soyoil. A customer account at RJ O'Brien stopped all 110 lots. The last trade date assigned was Aug. 4.
Rotterdam soybeans were higher and soymeal prices were mostly steady. European vegoils were flat to higher.
In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Thursday, amid cautious sentiment. The benchmark September contract settled RMB4 lower at RMB2,389 a metric tonne, after trading between RMB2,385/tonne and RMB2,396/tonne.
Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Thursday amid disappointment about the market's failure to breach a key resistance level and a smaller-than-expected decline in inventories. The benchmark October contract ended at MYR1,655 a metric tonne, down MYR22.
