August 30, 2007

 

CBOT Soy Outlook on Thursday: Up 5-7 cents following overnight trend, wheat

 

 

Chicago Board of Trade soybean futures are predicted to begin trading 5 to 7 cents higher Thursday, underpinned by higher prices overnight and the sharp rally in wheat futures, analysts said.

 

In overnight e-CBOT trading, Sep soybeans gained 6 1/2 cents to US$8.65 per bushel, and Nov rose 6 1/4 cents to US$8.80 1/2. E-CBOT volume in November was 5,194 contracts.

 

Soybeans should open higher but will lag behind the expected gains in the wheat and corn pits, said Don Roose, president of U.S. Commodities. "It will be the anchor" of the grain trade, since export sales released Thursday morning were disappointing, he said.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 321,600 metric tonnes for the week ended Aug 23. Analysts had expected sales between 300,000 and 800,000 metric tonnes. Sales for the 2007-08 marketing year were 404,100 tonnes, with sales for the 2006-07 crop year a negative 82,500 tonnes.

 

Sales of soymeal and soyoil were also weak and may limit upside momentum as well, Roose said.

 

Weather favorable to late season development is also expected to limit buying interest, a floor trader said.

 

Warmer and drier weather is likely in the next seven days, helping conditions improve in the northern and western areas of the U.S. Midwest, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest, mainly dry weather is forecast through Saturday, with temperatures averaging near to above normal Friday and Saturday.

 

In the eastern U.S. Midwest, mainly dry weather is expected Friday and Saturday with temperatures averaging near to slightly below normal in the period, Meteorlogix said.

 

In the six-to-10 day forecast, temperatures are expected to average near to above normal and rainfall is forecast to average near to above normal in the north and near to below normal in the south.

 

On daily technical charts, November soybeans closed nearer the session high and reached a fresh three-week high, and the bulls have the technical momentum, a technical analyst said.

 

The bulls' next upside price objective is closing prices above solid technical resistance at US$8.88, the August high. The bears' next downside objective is closing prices below solid support at US$8.50.

 

First resistance is seen at Wednesday's high of US$8.77 1/2 and then at US$8.80. First support is seen at US$8.67, Wednesday's low and then at US$8.62.

 

In overseas markets, crude palm oil futures settled higher on Malaysia's derivatives exchange Thursday with the benchmark November contract up MYR42 at MYR2,420 per metric tonne.

 

Soybean futures on China's Dalian Commodities Exchange settled higher following the gains seen in overnight CBOT futures analysts said. The benchmark May 2008 contract finished RMB43 higher at RMB3,725 per metric tonne.