September 18, 2008

 

CBOT Soy Outlook on Thursday: Up 8-10 cents, follow through buys, outside markets

 

 

Follow through buying from Wednesday's price bounce amid strength in outside markets is seen buoying Chicago Board of Trade soybean futures to start Thursday's day session.

 

CBOT soybean futures are called 8 to 10 cents higher.

 

In overnight electronic trading, November soybeans were 12 1/2 cents higher at US$11.51 1/2. December soyoil was 83 points higher at 45.25 cents per pound and December soymeal was US$4.80 higher at US$327.50 per short tonne.

 

The overnight theme will set the stage for a higher start, with crude oil up over US$4.00 a barrel, gold and silver futures firm and weakness in the U.S. dollar serving as catalysts to extend the higher tone, a CBOT floor analyst said.

 

A quiet news front continues to keep traders focused on outside financial markets, with global economic woes keeping investors looking for some save havens in commodities.

 

Precious metals were a key influence in the commodity sector Wednesday, with gold futures rallying over US$80 an ounce. At 9:02 a.m. EDT, December gold futures are up US$27.80 an ounce.

 

Underlying soybean market fundamentals remain solid amid tight nearby supplies and yield uncertainties, but favorable weather conditions for late maturing crops and harvesting in the Delta is bearish, traders said. These offsetting fundamental influences should keep attention on the outside markets, traders added.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at the August low of US$11.68 a bushel. The next downside price objective is pushing and closing prices below major psychological support at US$11.00.

 

First resistance for November soybeans is seen at US$11.50 and then at US$11.68. First support is seen at US$11.25 and then at Wednesday's low of US$11.07.

 

The DTN Meteorlogix weather forecast said dry weather for at least the next 5 days along with mostly above normal temperatures will help fields recover from recent rains and will help crops continue move towards maturity. Shower threats later in the period are mostly for the western Midwest region, but no significant cold weather is in sight, Meteorlogix said.

 

In the U.S. Delta, drier, warmer weather during the next 5 to 7 days will favor soybean harvests.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 411,500 metric tonnes. Analysts had forecast sales between 200,000 and 600,000 metric tonnes. The primary buyer was China with 114,900 tonnes.

 

Soymeal sales were a net 130,900 tonnes, at the high end of trade estimates that ranged from 50,000 to 130,000 tonnes. Soyoil commitments were a net 10,500 metric tonnes. Analysts had forecast sales between zero and 10,000 tonnes.

 

Egypt's state-owned Food Industries Holding Company said Thursday it was tendering to buy 25,000 to 30,000 metric tonnes of soybean oil on a cost and freight basis. The oil is for delivery in November, a FIHC official told Dow Jones Newswires.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday as funds retreat from the market. The benchmark January 2009 soybean contract settled RMB12 lower at RMB3,867/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange rose 7.1% Thursday, ending a three-day falling streak and wiping off all of Wednesday's losses amid short covering in volatile trade and a spate of fresh trade deals in the cash market for shipments in 2009. The benchmark December contract on the Bursa Malaysia Derivatives ended MYR145 higher at the intraday high of MYR2,185 a metric tonne.