September 21, 2006

  

CBOT Soy Outlook on Thursday: Flat to up 1 cent; e-CBOT, weather, demand

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session steady to firmer, in step with overnight action, as harvest slowing weather and solid underlying demand support prices.

 

In e-CBOT trade, November soybeans were 1 1/4-cent higher at US$5.50 1/2 per bushel. Soybean futures are called to open flat to 1-cent higher.

 

The market is garnering strength from Midwest moisture providing some harvest delays, another week of solid weekly export sales and firm cash prices - as farmers remain tight holders of supplies, said Don Roose of U.S. Commodities in West Des Moines, IA. 
 

Meanwhile, light support is expected from strength in soymeal futures, as good underlying domestic and export demand at current price levels continue to provide strength for the market, analysts added.

 

Nevertheless, traders say there remains potential for two-sided action as soybeans don't have many strong market moving influences to produce any major price movement, with some analysts saying futures are marking time before the heart of the harvest season begins.

 

A technical analyst said it will take a close above technical resistance at the September high of US$5.63 to begin to provide November soybeans with fresh upside technical momentum. The next major downside price objective for the contract is solid support at the contract low of US$5.37 1/2.

 

First resistance for November soybeans is seen at US$5.51 1/2 - Wednesday's high - and then at US$5.55. First support is seen at US$5.43 - Wednesday's low - and then at US$5.37 1/2 - the contract low.

 

The DTN Meteorlogix weather forecast says Midwest rains will likely delay early harvest activity during the next few days while cool and wet conditions slow the maturing process somewhat. Scattered showers and thunderstorms will produce from 0.50-2.00 inches of rain in the western belt Thursday through Saturday.

 

The eastern belt will remain mainly dry Wednesday, before showers move into the eastern belt Friday. Scattered showers and thunderstorms are on tap for Saturday, with rainfall in the eastern belt averaging 0.50-1.50 inches and locally heavier. Temperatures will be below normal Wednesday, near to below Friday, below normal in the western belt and near to above normal in the eastern belt Saturday, Meteorlogix forecasts.

 

U.S. Department of Agriculture said net weekly export sales for 2006-07 soybeans were 762,000 metric tonnes, 3% higher than the previous week. Trade estimates called for commitments in the 500,000 to 800,000 tonne range. The biggest buyers were China, buying 326,200 tonnes, and Japan with 94,100 tonnes. Soymeal old and new crop sales were 264,700 tonnes, compared to estimates of 50,000 to 150,000 tonnes. Soyoil sales were 25,400 tonnes, while the trade guess was 20,000 to 35,000 tonnes.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday. Spot cash soybean bids were down 2 cents in Peoria, Ill., and up 15 cents in Decatur, Ind., according to cash sources Thursday.

 

Rotterdam soybeans and soymeal were higher. European vegoils were flat to lower.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Thursday, supported by Wednesday's CBOT gains, analysts said. The benchmark January 2007 contract settled RMB3 higher at RMB2,545 a metric tonne, after trading between RMB2,542/tonne and RMB2,552/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Thursday, as short covering helped the market rebound from recent steep declines. The benchmark December CPO contract ended at MYR1,535 a metric tonne, up MYR7.