October 4, 2007

 

CBOT Soy Outlook on Thursday: Up 3-5 cents; e-CBOT, carryover buying

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's session higher, taking its cue from the overnight session as the market continues its recovery from prior losses.

 

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

 

In overnight e-CBOT trading, November soybeans were 3 1/2 cents higher at US$9.54 1/2, and January soybeans were 3 1/2 cents higher at US$9.73.

 

Carryover buying from Wednesday should serve as the catalyst for early price strength, as the ability of the market to find stability after sharp losses Tuesday provides technical support to futures, analysts said.

 

Spillover support from an expected higher start in wheat futures and overnight prices strength in Malaysian palm oil futures are seen lending support to the soycomplex as well, analysts added.

 

Meanwhile, bullish long range fundamental outlooks amid tightening supplies and strong domestic and global demand remain underpinning futures to limit downside risks, traders said.

 

A technical analyst said the next upside price objective for November soybeans is to push prices above solid resistance at US$9.90 1/2, which is the top of Tuesday's big downside price gap on the daily bar chart. The next downside price objective is closing prices below solid support at Wednesday's low of US$9.34 1/2.

 

First resistance for November soybeans is seen at Wednesday's high of US$9.57 1/2 and then at US$9.60. First support is seen at US$9.42 and then at Wednesday's low of US$9.34 1/2.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 666,100 metric tonnes for the week ended Sept. 27. The sales were primarily for China with 290,500 metric tonnes, unknown destinations with 79,400 tonnes, and Mexico with 76,100. Analysts had forecast sales between 600,000 and 850,000 metric tonnes. Soymeal sales were a net 188,400 tonnes, and soyoil commitments were 28,600 metric tonnes.

 

The U.S. Census Bureau released its revised soyoil stocks figure for August. The August stocks were pegged at 3.038 billion pounds, up from the 3.008 billion preliminary estimate reported in its Sept. 27 crush report.

 

In other news, the National Commodities Supply Corp., or Conab, is scheduled to release its first official estimate of the 2007-08 soy crop Thursday.

 

The DTN Meteorlogix Weather Service forecast said hot and mostly dry weather continues over Mato Grosso do Sul, Mato Grosso and southwest Goias for at least another seven days. High temperatures from the upper 90s to the low 100s Fahrenheit continue. Any significant soybean planting cannot take place until the rains arrive, Meteorlogix reports.

 

October soyoil deliveries totaled 3,622 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 1,276 and 1,229 lots respectively. The last trade date assigned was October 3.

 

October soymeal deliveries totaled 1,352 lots. The house account at Bunge Chicago was the primary issuer of 950 lots, with stoppers scattered among various commission houses. The last trade date assigned was Oct. 3.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange recovered sharply Thursday on fresh fundamental and speculative support and higher soyoil prices at CBOT, market participants said. The benchmark December contract on the Bursa Malaysia Derivatives gained MYR54 Thursday.