September 13, 2007

 

CBOT Soy Outlook on Thursday: Down 1-2 cents; consolidate after run to new high

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's day session modestly lower, as the market consolidates after Wednesday's run to new contract highs.

 

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

 

In overnight e-CBOT trading, November soybeans were 1-cent lower at US$9.37 1/2, and January soybeans were 2 1/4 cents lower at US$9.51 1/2.

 

The easier tone is seen more related to traders taking a breather from the recent run to new highs in the absence of fresh news overnight, but with futures maintaining bullish technical and fundamental momentum, downside risks remain limited, analysts said.

 

Traders are expected to keep an eye on other markets for signs of speculative fund influences, with long-term outlooks of tightening inventories, strong demand and a need to buy acres for next year continuing to limit selling interest in the face of upcoming harvest pressure, analysts added.

 

A technical analyst said Wednesday's contract high of US$9.59 1/2 basis the November future is strong overhead technical resistance for the market to overcome. The next downside price objective is closing prices below psychological support at US$9.00.

 

First resistance for November soybeans is seen at US$9.49 1/2 and then at US$9.59 1/2. First support is seen at US$9.30 and then at Wednesday's low of US$9.21.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 346,500 metric tonnes for the week ended Sept. 6. The sales were primarily for China with 142,500 metric tonnes, and Japan with 89,100 tonnes. Analysts had forecast sales between 300,000 and 550,000 metric tonnes. Soymeal sales were a net 54,100 tonnes, and soyoil commitments were 6,200 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said a second surge of cold weather may lead to a little more frost and a possible light freeze in some areas of the U.S. Midwest by Saturday. Some local farms may see some damage if temperatures dip below 30 degrees Fahrenheit. There are no significant harvest concerns at this time, however. In the Delta, heavy rains with potential flooding in southern areas due to a weakening hurricane Humberto would be unfavorable for maturing crops.

 

September soybean deliveries totaled 380 lots. A customer account at Man Professional Clearing was the primary issuer of 320 lots. The house account at Term Commodities stopped 104 lots. The last trade date assigned was Sept. 12.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply higher Thursday on bullish sentiment fueled by gains at the CBOT Wednesday, analysts said. The benchmark May 2008 soybean contract rose RMB58 higher at RMB4,066 a metric tonne, after trading between RMB4,035/tonne and RMB4,093/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivative Exchange ended higher Thursday on strong physical demand and a steady increase in crude oil and soyoil prices, said market participants. The benchmark November contract ended up MYR20 at MYR2,540/tonne after touching an intraday high of MYR2,564/tonne in the morning session.