August 31, 2006
CBOT Soy Outlook on Thursday: Up 1-2 cents; e-CBOT, end-of-month buys
Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session trading on firmer footing, in tune with the overnight theme.
Soybeans are called to open 1-2 cents higher.
In e-CBOT trade, November soybeans were 1-cent higher at US$5.56 3/4 per bushel.
The market is poised to start higher on follow through buying from Wednesday's bounce higher, with end-of-the-month position squaring expected to generate light buying support, analysts said.
Spillover strength from expected gains in the neighboring wheat and corn markets as well as early strength in outside inflationary markets may lend support to prices also, analysts added.
However, a lack of bullish fundamental news and the upcoming harvest remain defensive influences on prices, with mostly favorable weather conditions for filling crops expected to limit upside potential, traders said.
A technical analyst said if there is good follow-through buying interest Thursday, then a bullish key reversal up would be confirmed on the daily bar chart. However, right bearish momentum is still in control despite Wednesday's short-covering bounce. The next downside price objective for November soybeans is closing prices below solid technical support at US$5.50. It will take a close above technical resistance at US$5.70 to begin to provide some fresh upside technical momentum.
First resistance for November soybeans is seen at US$5.56 3/4 - this week's high - and then at US$5.60. First support is seen at US$5.50 and then at US$5.45.
The DTN Meteorlogix forecast said mainly dry conditions are on tap for the Midwest Thursday. Scattered showers and thundershowers are seen moving through western areas of the belt Friday or Saturday. The eastern belt will remain mainly dry with only a few light showers during this period. Temperatures will average near normal in the west and below normal in the east Thursday and Friday, and near to below normal Saturday.
USDA said weekly export sales for soybeans were 590,800 metric tonnes, versus trade estimates of 425,000 to 700,000 tonnes. 2005-06 sales totaled 29,700 tonnes, and 2006-07 sales totaled 561,100 tonne. The biggest buyers were China buying 230,000 tonne and unknown destinations with 126,000 tonnes. Soymeal old and new crop sales were 122,600 tonnes, compared to estimates of 125,000 to 250,000 tonnes. Soyoil sales were 21,700 tonnes, while the trade guess was zero to 25,000 tonnes.
In deliveries, a total of 1,626 delivery notices were posted against the September soybean future. The house account at ABN Amro issued 737 of the receipts and a customer account at RJ O'Brien issued 660 receipts. The last trade date assigned was August 28. 144 delivery notices were posted against the September soymeal contract. The house account at Bunge Chicago issued all 144 lots, with stoppers scattered among various firms. The trade date assigned was May 22. 2,120 delivery notices were posted against September soyoil, with the house account at Bunge Chicago issuing all 2,120 lots. The date trade assigned was August 29.
The U.S. Census Bureau revised its July soyoil stocks figure, raising the July stocks figure to 3.130 billion pounds from the 3.121 billion pounds originally reported August 24. The figure is up from June's stocks of 2.919 billion pounds and well above the 1.989 billion pounds reported at the same time last year.
U.S. Midwest cash soybean basis bids are mostly unchanged Thursday. Spot cash soybean bids were up 1-cent in Keokuk IA, up 2 1/2 cents in Peoria Ill., and up 1-cent in St. Louis, Mo., according to cash sources Thursday.
Rotterdam soybeans were higher and soymeal was mixed. European vegoils were mixed.
In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Thursday, following Wednesday gains in CBOT soybean, analysts said. The most active January 2007 contract settled RMB13 higher at RMB2,543 a metric tonne, trading between RMB2,536/tonne and RMB2,555/tonne.
