November 8, 2007

 

CBOT Soy Outlook on Thursday: Up 3-5 cents; e-CBOT, outside market support

 

 

Chicago Board of Trade soybean futures are called to open Thursday's day session firmer, feeding off overnight price support, with strength in outside inflationary markets an underpinning feature.

 

The U.S. dollar index is lower, crude oil and metal futures are higher.

 

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

 

In overnight e-CBOT trading, November soybeans were 4 1/2 cents higher at US$10.28 1/4 per bushel, and January soybeans were 5 1/4 cents higher at US$10.43 3/4.

 

The market is in a preparation mode for Friday's crop reports, but without fresh fundamental news traders are watching outside inflationary markets for early price direction, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Otherwise, futures have little fresh directives, with technical factors seen as a key influence. Supportive export sales may aid the advances also, with underlying support from continued light deliveries against the nearby November future helping promote a positive tone, analysts added.

 

A technical analyst said prices scored a mildly bearish "outside day" down on the daily bar chart Wednesday. Strong selling pressure on Thursday would confirm a bearish "key reversal" down on the daily bar chart, he said. Soybean bulls still have the solid near term technical advantage. The next upside price objective for January soybeans is to push and close prices above solid technical resistance at Wednesday's contract high of US$10.51. The next downside price objective is closing prices below strong support at US$10.25, which is the bottom of an upside price gap on the daily bar chart.

 

First resistance for January soybeans is seen at Wednesday's contract high of US$10.51 and then at US$10.60.

 

U.S. Department of Agriculture reported weekly soybean export sales were 614,500 metric tonnes for the week ended Nov. 1. The sales were primarily for China with 117,300 metric tonnes, and Japan with 99,100 tonnes. Analysts had forecast sales between 400,000 and 600,000 metric tonnes. Soymeal sales were a net 211,300 tonnes, and soyoil commitments were 7,300 metric tonnes.

 

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

 

USDA is scheduled to release its final crop production report of the year based off conditions as of Nov. 1, Friday. The average of analysts estimates from a Dow Jones Newswires survey peg U.S. soybean production at 2.606 billion bushels with a yield of 41.5 bushels an acre. The estimates are slightly above October USDA projections of 2.598 bushels with a yield of 41.4 bushels an acre. The average of estimates for the 2007-08 carryout is 213 million bushels, down slightly from the October USDA estimate of 215 million.

 

November soybean deliveries totaled 62 lots. A customer account at RJ O'Brien issued all 62 lots, with a customer account at Bank of America the primary stopper of 60 lots. The last trade date assigned was October 26.

 

In other news, the National Commodities Supply Corp, or Conab said Brazil should harvest 59.4 million metric tonnes of soybeans in the new 2007-08 crop. This is Conab's second crop estimate for the season. In the first estimate, released on Oct. 4, Conab put the crop between 59.3 million and 61.2 million tonnes.

 

Meanwhile, soybean production in Argentina for the 2007-08 campaign will reach 47.5 million metric tonnes, according to a USDA attach¨¦ report posted Wednesday on the Foreign Agricultural Services Web site.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on a technical correction after recent strong gains. The benchmark May 2008 soybean contract settled RMB19 lower at RMB4,511 a metric tonne.