September 28, 2007

 

CBOT Soy Outlook on Friday: Down 3-5 cents; USDA stocks, quarter end sales

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session lower, influenced by higher than expected stocks data and end of month/quarter position squaring, analysts said.

 

CBOT soybean futures are called to start the session 3 to 5 cents lower.

 

The U.S. Department of Agriculture found some more soybeans, with adjusted usage providing a little more cushion for the market as it moves forward into the 2007-08 marketing year, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The market is overdue for a setback after a nearly US$2.00 rally from August lows, with end of the month/quarter position squaring potentially a feature, analysts said.

 

However, expected price strength in wheat futures, bullish long range fundamentals, and higher outside inflationary markets should provide support to limit any declines, Roose added.

 

Meanwhile, any sign of selling exhaustion will attract speculative buyers as the market continues to look for price levels that will ration demand and attract additional soybean acres in South America and in the U.S. in 2008, a cash connected CBOT broker said.

 

USDA reported Sept. 1 stocks in all positions at a record 573 million bushels, up 27% from Sept. 1, 2006. The average of analyst's estimates surveyed by Dow Jones Newswires anticipated U.S. soybean supplies as of September 1, at 552 million bushels. The estimates ranged from 543 million to 558 million bushels. Indicated disappearance during the June-August period was 519 million bushels, up 4% from last year.

 

A technical analyst said market bulls gained more solid upside technical momentum and power Thursday. Prices are still in a steep uptrend from the August low, with still 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 solid resistance at US$10.25 a bushel. The next downside price objective is closing prices below solid support at US$9.92, which is the bottom of Thursday's upside price gap on the daily chart.

 

First resistance for November soybeans is seen at Thursday's contract high of US$10.17 1/2 and then at US$10.25. First support is seen at Thursday's low of US$9.98 and then at US$9.92.

 

The DTN Meteorlogix Weather Service forecast said dry weather and near to above normal temperatures continue in Brazil's northern Mato Grosso. Little change in the forecast is expected during the next 7-10 days. Long range forecasts indicate scattered showers and thunderstorms could develop during the week of Oct. 7. Any significant soybean planting cannot take place until the rains arrive, Meteorlogix reports.

 

USDA announced Friday private exporters reported the sale of 120,000 metric tonnes of soybeans for delivery to China in the 2007-08 marketing year.

 

October soyoil deliveries totaled 3,309 lots. The house account at ADM Investor Services issued of 1,736 lots, and the house account at Term Commodities issued 801 lots. A customer account at RJ O'Brien was the primary stopper of 1,630 lots. The last trade date assigned was Sept. 26.

 

October soymeal deliveries totaled 414 lots. The house account at ADM Investor Services issued 85 lots, and a customer account at Man Professional Clearing issued 199 lots. A customer account at RJ O'Brien was the primary stopper of 288 lots. The last trade date assigned was Sept. 6.

 

In other news, China sent back 460 metric tonnes of U.S. soybeans due to the discovery of a pest called the Khapra beetle, the Chinanews.com cited General Administration of Quality Supervision, Inspection and Quarantine as saying Friday. China sent back the soybeans and has suspended soybean exports from the Scoular Co. which shipped them, it said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, with major contracts closing at record highs, after their counterparts at CBOT set new contract highs Thursday. The benchmark May 2008 soybean contract settled RMB5 higher at RMB4,203 a metric tonne.

 

Cash soybean prices in China's major producing regions were higher in the week to Friday higher prices for imported soybean and new domestic soybean.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday on speculative late afternoon buying, healthy export prospects and positive cues from a rise in global soyoil and crude oil prices, market participants said. The benchmark December contract at the Bursa Malaysia Derivatives ended MYR39 higher at MYR2,644 a metric tonne.