November 14, 2007

 

CBOT Soy Outlook on Wednesday: Up 10-12 cents on speculative, inflationary buying

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's session higher, buoyed by renewed speculative and inflationary based buying, analysts said.

 

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

 

CBOT soybean futures are called to start the session 10 to 12 cents higher.

 

In overnight e-CBOT trading, November soybeans were 11 cents higher at US$10.55 1/4 per bushel, and January soybeans were 12 1/2 cents higher at US$10.68 3/4.

 

A sharply lower U.S. dollar coupled with prices strength in outside metal and energy markets is spillover to attract speculative buying, analysts said.

 

Lingering worries over tightening U.S. ending stocks as we move deeper in the 2007-08 marketing year coupled with good underlying export demand is serving as the fundamental catalysts to bolster bullish enthusiasm as well, said Don Roose, president U.S. Commodities in West Des Moines Iowa.

 

The backlash of supportive private acreage estimates and the impact that would have on 2008-09 supplies if those smaller projected planted acreage would become reality is aiding the bullish longer term view on the market as well, Roose added.

 

A technical analyst said bean bulls have the solid near term technical advantage and gained more power Tuesday. The next upside price objective for January soybeans is to push and close prices above major psychological resistance at US$11.00 a bushel. 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 Tuesday's contract high of US$10.62 1/4 and then at US$10.70. First support is seen at Tuesday's low of US$10.52.

 

U.S. Department of Agriculture said 97% of the U.S. soybean crop was harvested, up from the 94% completed at this time last year and the five-year average of 94%. The harvest progress matched analysts' expectations.

 

The National Oilseed Processors Association said Wednesday its October soybean crush rate was 154.974 million bushels. That was up from the September figure of 139.8 million bushels and on par with the 154.984 million at the same period last year. The average of estimates from analysts surveyed by Dow Jones Newswires was 155.8 million. Soyoil stocks were reported at 2.680 billion pounds. The stocks were up from the September stock figure of 2.561 billion, and above the average of estimates at 2.596 billion.

 

November soybean deliveries totaled 358 lots. The house account at Rosenthal Collins Group issued 255 lots, with a customer account JP Morgan stopping all 358 lots. The last trade date assigned was November 5.

 

In other news, Egypt's state-owned Food Industries Holding Company said Wednesday it bought 25,000 metric tonnes of soybean oil in a tender. The oil is for shipment during the second half of December and early January, an FIHC official said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply up Wednesday on Tuesday's gains in CBOT soybean and strong domestic fundamentals. The benchmark September 2008 soybean contract settled RMB80 higher at RMB4,512 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange moved slightly higher in narrow range bound trade Wednesday, looking for fresh fundamental leads amid likely fall in exports, market participants said. The benchmark January CPO contract on Bursa Malaysia Derivatives ended MYR10 higher at MYR2,934 a metric tonne.