November 15, 2007

 

CBOT Soy Outlook on Thursday: Down 6-8 cents; e-CBOT; outside market weakness

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session on the defensive, in step with overnight declines as outside market weakness spills over to apply pressure.

 

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

 

CBOT soybean futures are called to start the session 6 to 8 cents lower.

 

In overnight e-CBOT trading, January soybeans were 8 cents lower at US$10.71 1/2 per bushel, and March soybeans were 7 1/2 cents lower at US$10.86 1/2.

 

A quiet news front will keep attention on outside markets once again, with the higher dollar index and declines in crude oil and metal futures expected to attract selling interest, analysts said.

 

Light speculative profit taking will play a role in the declines amid ideas Wednesday's spike to new highs was overdone, analysts added. However, with the dollar still in an overall bearish trend, solid underlying demand and worries over longer term tightening of supplies, downside weakness should remain limited, traders said.

 

A technical analyst said bean bulls have the solid near term technical advantage and gained more power Wednesday. 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$10.49 1/2, 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$10.80 and then at US$10.90. First support is seen at Wednesday's low of US$10.67 and then at US$10.62 1/2.

 

Meanwhile, U.S. Department of Agriculture announced Thursday that private exporters reported the sale of 110,000 metric tonnes of soybeans were sold to China for delivery in the 2007-08 marketing year.

 

The USDA's weekly export sales report normally released on Thursdays will be delayed until Friday due to Monday's Veterans Day holiday.

 

The DTN Meteorlogix Weather Service forecast said wet weather in Brazil's Rio Grande do Sul and Parana states is disrupting planting and may force some replanting. Generally favorable conditions for planting and development are seen for Mato Grosso.

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher, but the market may see a downward correction in the near term as prices have risen too much, traders said. The benchmark September 2008 soybean contract settled RMB52 higher at 4,564 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange moved higher Thursday but thin, range bound trade prevented the market from cracking the MYR3,000 level despite strong gains Wednesday in soyoil and crude oil futures, market participants said. The benchmark January contract on Bursa Malaysia Derivatives ended MYR8 higher at MYR2,942 a metric tonne, after reaching an intraday high of MYR2,982/tonne.