September 20, 2007

 

CBOT Soy Outlook on Thursday: Up 8-9 cents, technical, fundamental strength buoys

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session higher, continuing their bullish theme on supportive fundamentals and technical strength.

 

CBOT soybean futures are called to start the session 8 to 9 cents higher.

 

In overnight e-CBOT trading, November soybeans were 9 cents higher at US$9.80, and January soybeans were 9 cents higher at US$9.95.

 

The market is poised to follow the overnight trend, with technically induced gains a feature, as the market attempts to buy soybean acres, with dry conditions in northern Brazil also providing supportive concerns, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Rumors of fresh export demand is adding strength as well, with tight supply outlooks and talk of China lowering import duties on soybeans providing the latest dose of bullish news to attract speculative buyers, analysts said.

 

The market remains in a bullish uptrend and any supportive input provides incentives for buyers to add length in the market, a trader said. New contract high price levels were set overnight, with deferred months propelling above the US$10.00 level.

 

The market has enough longer range supply concerns and acreage uncertainties to entice traders to keep adding premium to prices, with near term upside technical objectives featured, a CBOT floor analyst added.

 

A technical analyst said prices are still in a steep uptrend from the August low, with no strong technical signs of a market top being in place. The next upside price objective for November soybeans is to push and close prices above major psychological resistance at US$10.00 a bushel. The next downside price objective is closing prices below support at US$9.49 1/2.

 

First resistance for November soybeans is seen at the contract high of US$9.74 1/2 and then at US$9.85. First support is seen at US$9.60 and then at Wednesday's low of US$9.53. US$9.74 1/2 - the contract high

 

The U.S. Department of Agriculture reported weekly soybean export sales were 513,600 metric tonnes for the week ended Sept. 13. The sales were primarily for Japan with 153,700 metric tonnes, and China with 141,100 tonnes. Analysts had forecast sales between 300,000 and 700,000 metric tonnes. Soymeal sales were a net 199,300 tonnes, and soyoil commitments were 6,300 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said any significant rainfall in Brazil during the next 7-10 days will be confined to Rio Grande do Sul and southern Parana. Hot, dry weather will continue over central Brazil. There is no sign of any significant rainfall developing in the northern Mato Grosso during the next 10-15 days. Any early planting of soybeans in the northern Mato Grosso during the latter half of September will not take place this year with current indications that the dryness will persist at least into early October.

 

In the U.S. Midwest, generally favorable harvest weather is on tap through the weekend. Scattered showers and thunderstorms early next week will disrupt the harvest before dry weather returns during the mid to latter part of next week.

 

In other news, Egypt's state-owned Food Industries Holding Company bought 15,000 metric tonnes of soybean oil in a tender, traders said Thursday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday for the second consecutive day on profit-taking. Benchmark May 2008 soybean contract settled RMB31 lower at RMB4,078/tonne.

 

China is likely to announce a temporary reduction of soybean import duty to 1% from 3% for three months to encourage imports, traders and industry officials said Thursday. It's not yet clear whether the temporary reduction will last from October to December or from November to January, but the move to attract more imports is designed to curb high domestic soybean prices, traders said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended little changed Thursday amid thin trade and weak soyoil on CBOT, market participants said. The benchmark December contract at Bursa Malaysia Derivatives ended MYR2 lower at MYR2,569/tonne, after trading in a narrow range between MYR2,556 and MYR2,584/tonne.