December 7, 2006

 

CBOT Soy Outlook on Thursday: Seen firmer; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade is seen starting Thursday's day session firmer, taking its cue from overnight action in a recovery from Wednesday's declines.

 

Soybean futures are called to open 2 to 3 cents higher.

 

In e-CBOT trade, January soybeans were 2 1/4 cents higher at US$6.56 1/2 and March was 3 1/4 cents higher at US$6.71 1/2 per bushel.

 

The market is expected to find stability after recent declines based on overnight trade, but volatile price action may be in store as the trade remains in a consolidative phase, a CBOT floor analyst said.

 

A quiet news front is seen keeping technical features in play, but a weekly export sales figure near the low end of estimates, a higher than expected Canadian canola crop estimate and bearish South American crop conditions may apply mild pressure to limit upside potential, traders added.

 

A market technician said Wednesday's close at the lowest level in five weeks produced some near-term chart damage. The next upside price objective for January futures is to close prices above solid resistance at US$6.75 3/4 a bushel, and the next downside price objective is closing prices below solid support at the mid-November "reaction low" of US$6.51 1/2.

 

First resistance for January soybeans is seen at Wednesday's high of US$6.62 1/2 and then at this week's high of US$6.67. First support is seen at US$6.51 1/2 and then at US$6.50.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 667,000 metric tonnes. Trade estimates called for commitments in the 600,000- to 800,000- tonne range. The biggest buyers were Japan buying 130,000 tonnes and China, buying 126,700 tonnes.

 

Soymeal sales were 166,500 tonnes. Analysts' estimates called for commitments in a range of 125,000 to 175,000 tonnes. Soyoil 2006-07 sales were a marketing year high 48,400 tonnes, while the trade guess was 30,000 to 40,000 tonnes. China was the primary buyer of 30,000 tonnes.

 

The U.S. Census Bureau revised its October soyoil stocks figure, marginally raising the October stocks figure to 3.035 billion pounds from the 3.005 reported Nov. 30. The figure is up from September's stocks of 3.019 billion pounds but well above the 1.884 billion pounds reported at the same time last year.

 

Statistics Canada released its latest Canadian canola crop estimates. The crop was estimated at 9.105 million metric tonnes, up from the previous estimate of 8.485 million and above trade estimates of 8.000 million to 8.800 million.

 

In deliveries, a total of 1,258 delivery notices were posted against the December soyoil future. Issuers and stoppers ere widely scattered among various commission houses, with the house account at Term Commodities stopping of 269 lots. The last trade date assigned was Dec. 6. Soymeal delivery notices totaled 981 lots. Issuers and stoppers were widely scattered. The last trade date assigned was Dec. 6.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday. Spot cash soybean bids were up 5 cents in Keokuk, IA, down 2 cents in Peoria, Ill., and down 3 cents at St. Louis, according to cash sources Thursday.

 

Rotterdam soybeans were flat and soymeal was mixed. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange ended mostly lower Thursday, pressured by losses in CBOT soybean futures Wednesday, analysts said. The benchmark May 2007 contract settled CNY17 lower at CNY2,813 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended mixed after choppy trade Thursday, with losses in soyoil futures and a strong ringgit keeping the market under pressure. The benchmark February contract ended down MYR3 at MYR1,850 a metric tonne.