August 23, 2007

 

CBOT Soy Outlook on Thursday: Up 4-6 cents on technical buys, Crop worries, demand

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's session higher, fueled by technical buying, with crop worries and solid weekly export sales supportive features.

 

CBOT soybean futures are called to start the session 4 to 6 cents higher.

 

In overnight e-CBOT trading, September soybeans were 6 1/4 cents higher at US$8.37 1/2, and November soybeans were 6 1/2 cents higher at US$8.53 1/2.

 

The market is poised to continue to its recovery from prior lows, with worries associated with yield and production potential amid flooding in the upper Midwest and heat and dryness stress in the southern soybean belt raising the stakes in soybeans, analysts said.

 

Technical buying is expected to remain a feature, with traders targeting near-term upside objectives, with supportive weekly export sales and crushing data aiding the cause, analysts added.

 

A technical analyst said a potentially bearish pennant pattern on the daily bar chart was negated Wednesday and the bulls have gained some fresh upside technical momentum. The next upside price objective for November soybeans is pushing prices above solid technical resistance at US$8.51 1/2, which would fill on the upside last week's big downside price gap on the daily chart. The next downside price objective is closing prices below solid support at US$8.30.

 

First resistance for November soybeans is seen at US$8.51 1/2 and then at US$8.55. First support is seen at US$8.40 and then at Wednesday's low of US$8.37.

 

The DTN Meteorlogix Weather Service forecast said additional heavy storms may bring more flooding concerns to the western and northern Midwest Thursday into Friday. Meanwhile, hot and dry weather continues over the southeast Midwest until a cold front arrives Saturday. Long range charts suggest a chance for scattered showers in this area during the middle of next week.

 

In the Delta, hot, dry weather continues to stress late filling soybeans, Meteorlogix reports.

 

Crop scouts on the western leg of the John Deere/Pro Farmer U.S Midwest crop tour reported Western Iowa's corn yields and soybean pod counts were seen as widely variable in the three cropping districts surveyed in the state. Soybean pod counts in Illinois are following the overall trend set by other states in the eastern Midwest and are expected to be 5.7% lower than last year, crop scouts on the eastern leg of the 2007 John Deere/Pro Farmer Midwest Crop Tour said Tuesday. The Illinois soybean count was an average 1,297.7 pods, down 5.7% from one year ago when the state averaged 1,374.7 pods on the crop tour.

 

The Census Bureau reported soybean crushings in July totaled 150.6 million bushels. The figure was slightly above with the average survey estimate of 149.3 million bushels, up from June's 148.7 million and above last year's 148.5 million. Soyoil stocks slipped to 3.246 billion pounds from June's 3.357 billion. The average of survey estimates was 3.297 billion pounds. Soymeal stocks were reported at 318,153 short tonnes. The stock figure was up from June's 317,064, but below the average estimate of 323,800 thousand tonnes.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 957,800 metric tonnes for the week ended Aug. 16. Included in the total were sales of 952,000 metric tonnes for the 2007-08 marketing year. The 2007-08 sales were primarily for China with 528,000 metric tonnes, unknown destinations with 193,000 tonnes and Japan with 103,500 tonnes. Analysts had forecast sales between 250,000 and 500,000 metric tonnes. Soymeal sales were a net 256,600 tonnes, and soyoil commitments were 19,600 metric tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, following gains at the CBOT. The benchmark May 2008 soybean contract settled RMB42 higher at RMB3,637 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly higher Thursday on strong demand in the cash market amid speculation of a likely increase in export tariffs on Indonesian palm oil, trade participants said. The benchmark November contract on the Bursa Malaysia Derivatives ended up MYR5 at MYR2,430 a metric tonne.