August 14, 2008

 

CBOT Soy Outlook on Thursday: Up on carryover from Wednesday's limit Move

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session higher on follow-through buying from Wednesday's limit-up close.

 

CBOT soybean futures are called 10 to 15 cents higher.

 

In overnight electronic trading, August soybeans were 17 cents higher at US$12.87 and November soybeans were 11 cents higher at US$12.95. December soyoil was 13 points lower at 53.15 cents per pound and December soymeal was US$4.10 higher at US$356.10 per short tonne.

 

The firm overnight theme is setting the tone for a higher start, with traders looking to add some risk premium amid the uncertainties of crop potential, analysts said.

 

The market remains sensitive to the idea that soybean crops have no room for error with late season weather amid tight projected ending stocks, analysts added.

 

However, mixed signals from outside markets, favorable near-term crop conditions and lower-than-expected weekly export sales and monthly crush figures are seen as hindrances to upside potential, a CBOT floor broker said.

 

A market technician said the next upside price objective for November soybeans is to push and close prices above psychological resistance at US$13.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$12.50.

 

First resistance for November soybeans is seen at US$13.00 and then at the April high of US$13.16 3/4. First support is seen at US$12.75 and then at US$12.50.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 69,500 metric tonnes. Analysts had forecast sales between 200,000 and 600,000 metric tonnes. Net sales for the 2007-08 crop year resulted in a net sales reduction of 49,700 tonnes for the week ended Aug. 7. Sales for the 2008-09 marketing year were 119,200 tonnes, with the primary buyer China with 50,000 tonnes.

 

Soymeal sales were a net 96,400 tonnes, within trade estimates of 50,000 to 200,000 tonnes. Soyoil commitments were a net 37,500 metric tonnes. Analysts had forecast sales between zero and 15,000 tonnes.

 

The National Oilseed Processors Association says 133.034 million bushels of soybeans were crushed in July, down from 133.513 million in June and below the average analyst estimate of 138.5 million. The range of pre-report estimates was 135 million to 142.2 million. Soyoil stocks were pegged at 2.367 billion bushels, down from 2.449 billion, and below the average analyst estimate of 2.376 billion. The range of estimates was 2.350 billion pounds to 2.389 billion pounds.

 

The DTN Meteorlogix weather forecast said mostly favorable conditions remain on tap for soybeans in most areas of the U.S. Midwest at this time. The exception may be that southern Minnesota is somewhat too dry. Rainfall potential in this area has diminished somewhat during the past few days. In the U.S. Delta, an improving rainfall pattern will ease stress to pod-filling soybeans.

 

In deliveries, August soybean deliveries totaled 176 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was Aug. 13.

 

CBOT August soybean, soymeal and soyoil futures expire at 1 p.m. EDT.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Thursday following strong gains on the Chicago Board of Trade Wednesday. The benchmark January 2009 soybean contract settled RMB129 higher at RMB4,202 a tonne, or 3.2.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 2.8% higher Thursday in a technical rebound with support from soyoil and on expectations that estimates due this week will show a sharp rise in exports. The benchmark October contract on Bursa Malaysia Derivatives ended MYR72 higher at MYR2,620 a tonne.