August 15, 2007

 

CBOT Soy Outlook on Wednesday: Up 1-2 cents; e-CBOT, consolidation theme

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session slightly firmer, taking their cue for overnight trade, with consolidation from Tuesday's declines a feature.

 

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

 

In overnight e-CBOT trading, September soybeans were 1 1/2 cents higher at US$8.52 1/2, and November soybeans were 1/2 cent higher at US$8.66 1/2.

 

The absence of fresh fundamental news is expected to promote some short covering, with prices consolidating amid ideas Tuesday's declines were a bit overdone, analysts said.

 

However, traders are expected to take a cautious approach to upside moves, as market jitters relating to potential fund selling associated with world equity market weakness is seen keeping participants on their toes, a CBOT floor analyst said.

 

The potential for rains to move into dry areas of the soybean belt are expected to apply mild pressure, with traders keeping an eye on the potential for a tropical storm to move moisture into the Delta in the near future, he added.

 

Meanwhile, demand news should provide some support, a trader said. U.S. Department of Agriculture announced private exporters reported the sale of 120,000 metric tonnes of U.S. soybeans to China in the 2007-08 marketing year.

 

A technical analyst said bullish momentum faded a bit Tuesday but no serious chart damage occurred. The next upside price objective for November soybeans is pushing prices above solid technical resistance at this week's high of US$8.88. The next downside price objective is closing prices below solid support at US$8.50.

 

First resistance for November soybeans is seen at US$8.70 and then at US$8.75. First support is seen at Tuesday's low of US$8.63 1/2 and then at US$8.59.

 

The DTN Meteorlogix Weather Service forecast said light or locally moderate showers are seen for the western Midwest through central and southern locations Friday. The highest rainfall amounts and coverage should be in Iowa and eastern Nebraska. Temperatures will average above to well above normal Wednesday, near to below normal north and above normal south Thursday and Friday.

 

In the eastern Midwest, light or locally moderate showers are on tap through northern and eastern areas during the next few days. Dry conditions with possibly a few light showers are expected for southwest areas during this time. Temperatures will average above or well above normal during Wednesday and Thursday, near to above normal Friday, Meteorlogix reports.

 

In the Delta, mainly dry conditions are on tap for Wednesday through Friday, with temperatures averaging well above normal. Highs Wednesday and Thursday should range from 100 to 107 Fahrenheit, Meteorlogix forecasts.

 

August soybean deliveries totaled 48 lots. Issuers and stoppers were scattered among various commission houses, with the house account at Term Commodities a stopper of 14 lots. The last trade date assigned was August 14.

 

In other news, the share of U.S. soybeans imported by Taiwan may rise to 78% this year from around 76% last year, said Anthony Chang, country director of the American Soybean Association in Taiwan. An increasing quantity of soybeans is being brought into Taiwan through containers instead of panamax vessels, and since U.S.-Taiwan container traffic is quite high, it would contribute to an increase in U.S. soybean exports to Taiwan.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended a tad lower Wednesday, dragged down by weak soyoil futures and bearish remarks from an influential analyst. The benchmark October contract on Bursa Malaysia Derivatives at MYR2,484 a metric tonne, down MYR6 from Tuesday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Wednesday following declines at CBOT Tuesday. The benchmark May 2008 soybean contract settled RMB6 lower at RMB3,609 a metric tonne.