November 16, 2006

 

CBOT Soy Outlook on Thursday: Up 3-5 cents; in tune with the overnight theme

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session on firm footing, taking its cue from overnight action amid the absence of fresh news to drive the market.

 

Soybean futures are called to open 3 to 5 cents higher.

 

In e-CBOT trade, January soybeans were 5 cents higher at US$6.68 3/4 and March was 4 1/2 cents higher at US$6.80 1/2 per bushel.

 

Bullish market sentiment is seen providing underlying support to prices as the potential for acreage reductions in 2007 and a building biodiesel industry, keep speculative buyers inspired, analysts said.

 

However, traders anticipate choppy action will continue as ample U.S. and world supplies coupled with favorable South American conditions spark profit taking pressure on any sign of exhausted upside movement, analysts added.

 

The market is expected to keep an eye on movements in corn, with speculative fund activity monitored closely in the absence of fresh developments to direct prices, traders said.

 

A technical analyst said despite Wednesday's losses the market still has a bullish near-term technical advantage. The next upside price objective is to close January futures above solid chart resistance at the contract high of US$6.82 1/2 a bushel. The next downside price objective is closing prices below solid support at US$6.50.

 

First resistance for January soybeans is seen at US$6.70 and then at Wednesday's high of US$6.76. First support is seen at Wednesday's low of US$6.62 1/2 and then at US$6.60.

 

U.S. Department of Agriculture said net weekly export sales for soybeans were 755,700 tonnes, 7% lower than the previous week and 6% below the prior the 4-week average. Trade estimates called for commitments in the 550,000 to 900,000 tonne range.

 

The biggest buyer was China, buying 298,600 tonnes. Soymeal sales were 134,200 tonnes, compared to estimates of 75,000 to 175,000 tonnes. Soyoil 2006-07 sales were 18,000 tonnes, while the trade guess was zero to 7,000 tonnes. The primary buyer was South Korea with buying 12,000 tonnes.

 

USDA also announced Thursday private exporters reported the sale of 115,000 metric tonnes of U.S. soybeans for delivery to unknown destinations in the 2006-07 marketing year.

 

In news, Thailand next year will lift quotas on imports of soymeal by animal feed and livestock associations from member countries of the World Trade Organization, a Ministry of Commerce official said Thursday.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday. Spot cash soybean bids were up 5 cents in Sioux City, Iowa, down 2 cents in Peoria, Ill., and down 6 cents in Frankfort, Ind., according to cash sources Thursday.

 

Rotterdam soybeans and soymeal were lower. European vegoils were lower.

 

In overseas markets, Soybean futures traded on China's Dalian Commodity Exchange settled Up Thursday, supported by fresh long buying, analysts said. The most active May 2007 contract settled RMB37 higher at RMB2,910 a metric tonne, after trading between RMB2,862/tonne and RMB2,930/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Thursday in volatile trading as a rally stalled amid concerns the market may have risen too much, analysts said. The benchmark February contract ended MYR2 lower at MYR1,755 a metric tonne.