October 11, 2007

 

CBOT Soy Outlook on Thursday: Up 2-4 cents; e-CBOT, pre-report positioning

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session firmer, following the overnight theme, with supportive outside influences and pre crop report positioning featured.

 

CBOT soybean futures are called to start the session 2 to 4 cents higher.

 

In overnight e-CBOT trading, November soybeans were 2 3/4 cents higher at US$9.71, and January soybeans were 1/4-cent higher at US$9.87.

 

The impact of higher crude oil and metals futures, coupled with a weaker U.S. dollar is expected to lend strength to prices to start the day, analysts said.

 

Positioning ahead of Friday's crop production report amid lingering fears of smaller U.S. planted and harvested acreage is seen generating further support to underpin prices, analysts added.

 

The U.S. Department of Agriculture is scheduled to release its latest production, yield and supply and demand estimates Friday at 8:30 a.m. EDT. The average of analysts' estimates pegged 2007 soybean production at 2.648 billion bushels, up from the September figure of 2.619 billion. The average was from a range of 2.583 billion to 2.722 billion bushels. Ending stocks for 2007-08 were estimated at 238 million bushels from a range of estimates that span from 193 million to 285 million bushels.

 

Overnight gains in Malaysian palm oil futures, technical strength and rumors of fresh demand from China this week are underlying factors that should aide the higher tone as well, traders said.

 

Otherwise, a quiet news front may keep activity thin, as some traders move to the sidelines, unwilling to take on added risk ahead of Friday's crop reports.

 

Meanwhile, a technical analyst said market bulls this week have regained fresh upside technical momentum. The next upside price objective for November soybeans is to push and close prices above solid resistance at US$9.90 1/2, which is the top of this month's big downside price gap on the daily bar chart. The next downside price objective is closing prices below solid support at US$9.50.

 

First resistance for November soybeans is seen at Wednesday's high of US$9.69 1/2 and then at US$9.73. First support is seen at US$9.60 and then at Wednesday's low of US$9.56.

 

The DTN Meteorlogix Weather Service forecast said harvest conditions in the western and northern U.S. Midwest should improve during the next few days under mostly fair skies. Rain could return as soon as Monday.

 

In Brazil, hot temperatures and only isolated light showers are on tap for Thursday and Friday. Scattered thundershowers are possible during the weekend, with rainfall potential 0.25-1.00 inch and locally heavier. Drier, hotter weather may return during the middle of next week, Meteorlogix reports.

 

October soyoil deliveries totaled 1,568 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 10. October soymeal deliveries totaled 718 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 10.

 

In other news, India's soymeal exports for the 2007-08 oilmeal marketing year are likely to top 4.0 million metric tonnes due to the expected bumper crop, a senior industry official said Thursday. India is expected to harvest a record crop of 8.86 million tonnes this year, up from 7.14 million tonnes a year ago, according to the trade body.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, following Wednesday's gains at CBOT. The benchmark May 2008 soybean contract settled RMB37 higher at RMB4,200 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher for the third straight day Thursday, due to speculative buying and supportive cues from soyoil prices, market participants said. The benchmark December contract at the Bursa Malaysia Derivatives ended MYR35 higher at MYR2,680/tonne.