December 6, 2007

 

CBOT Soy Outlook on Thursday: Down 7-10 cents; overnight theme; outside markets

 

 

Soybean futures at the Chicago Board of Trade is seen starting Thursday's session on the defensive, following the overnight theme, with weakness from outside markets applying pressure.

 

Crude oil futures and metal futures are lower, and the U.S. dollar index is higher in early action.

 

CBOT soybean futures are called to start the session 7 to 10 cents lower.

 

In overnight e-CBOT trading, January soybeans were 10 1/2 cents lower at US$10.89 per bushel, and March soybeans were 11 cents lower at US$11.06 1/2.

 

The market is poised for some profit taking pressure to emerge in early action, as a lack of any new bullish inputs coupled with declines in crude oil and metal futures attract speculative sales, analysts said.

 

After recent gains and new highs established in soymeal Wednesday, traders anticipate some consolidative trade to surface without new features to feed bullish appetites, analysts added.

 

However, underlying supportive fundamental outlooks, with uncertainty tied to South American production and higher than solid demand are not expected break the overall bullish trend, a CBOT floor analyst said.

 

A market technician said the next upside price objective for January soybeans is to push and close prices above solid resistance at the contract high of US$11.09 1/2 a bushel. The next downside price objective is closing prices below strong support at this week's low of US$10.68 1/2.

 

First resistance for January soybeans is seen at Wednesday's high of US$11.05 and then at US$11.09 1/2. First support is seen at Wednesday's low of US$10.89 1/2 and then at US$10.80.

 

The DTN Meteorlogix Weather Service said there continues to be a drier-than-normal weather pattern for Argentina. This is especially true over the western and southern crop regions. Stress is lower now due to cooler temperatures but will increase with increasing temperatures during the coming days.

 

U.S. Department of Agriculture reported weekly soybean export sales were 993,500 metric tonnes for the week ended Nov. 29. 2007-08 marketing year sales totaled 803,800 metric tonnes. The sales were primarily for China with 351,700 metric tonnes, and the Netherlands with 123,400 tonnes. Analysts had forecast sales between 600,000 and 800,000 metric tonnes. Soymeal sales were a net 163,400 tonnes, and soyoil commitments were 41,000 metric tonnes.

 

The U.S. Census Bureau released its revised soyoil stocks figure for October. The October stocks were pegged at 3.044 billion pounds, up from the 3,028 billion preliminary estimate reported in its Nov. 29 crush report.

 

In deliveries, December soyoil deliveries totaled 1,538 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 735 and 350 lots respectively. The house account at ADM Investor Services stopped 42 lots. The last trade date assigned was December 5.

 

December soymeal deliveries totaled 307 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 130 and 175 lots respectively. The last trade date assigned was December 5.

 

In other news, India's soymeal exports in November totaled 531,268 metric tonnes, up 47.18% from 360,971 tonnes a year earlier, the Soybean Processors Association of India, or SOPA, said Thursday.

 

Brazil's new 2007-08 soy crop is 89% planted as of Dec. 4, said agribusiness consulting AgRural on Thursday. The top two soy growing states, Mato Grosso and Parana, are coming to the home stretch of planting, with nearly 98% planted at this time. AgRural estimates soy planted area to be 22.4 million hectares, up from 21.3 million last year.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, tracking losses in CBOT soybean futures resulting from weakness in crude oil. In Dalian, the September 2008 soybean contract settled RMB33 lower at RMB4,289/tonne.

 

Crude palm oil futures traded on Malaysia's derivatives exchange fell to a five-week low Thursday, mainly on profit-taking after a slump in crude oil and soyoil futures, trade participants said. The benchmark February contract ended MYR60 lower at MYR2,850/tonne, close to an intraday low of MYR2,838/tonne.