December 7, 2007

 

CBOT Soy Outlook on Friday: Up 6-8 cents; follows e-CBOT, supportive trend

 

 

Chicago Board of Trade soybean futures are expected to open Friday's day session on firm footing, taking its cue from the higher overnight theme.

 

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

 

In overnight e-CBOT trading, January soybeans were 8 1/4 cents higher at US$11.07 per bushel, and March soybeans were 7 1/4 cents higher at US$11.25.

 

CBOT most active January and March futures notched new contract highs overnight.

 

The combination of bullish fundamental and technical trends coupled with weakness in the U.S. dollar is seen promoting follow through buying from Thursday and overnight price strength, analysts said.

 

Outside markets are providing little direction to prices, with a quiet news front expected to keep technical factors in play, analysts added.

 

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

 

Nevertheless, demand trends remain supportive and with technical buying expected as prices challenge contract highs, buyers are expected to remain the dominant players in the market, a CBOT floor analyst said.

 

However, without any fresh fundamental news, profit taking remains a possibility as traders square a few positions heading into the weekend, he added.

 

A market technician said the next upside price objective for January 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 US$10.80.

 

First resistance for January soybeans is seen at this week's high of US$11.05 and then at US$11.09 1/2. First support is seen at Thursday's low of US$10.93 and then at US$10.89.

 

The DTN Meteorlogix Weather Service said Friday's long range charts have introduced a chance for significant shower activity to the central crop areas of Argentina later next week. This is faster than what was indicated Thursday but it is still in the long range and therefore uncertain.

 

In Brazil, less rainfall is projected for Rio Grande Do Sul during the next week, with soil moisture supplies seen slowly diminishing in this area, Meteorlogix reports.

 

In deliveries, December soyoil deliveries totaled 1,293 lots. Issuers and stoppers were scattered among various commission houses, with the house account at ADM Investor Services a stopper of 40 lots. The last trade date assigned was Dec. 6.

 

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 175 and 178 lots respectively. The last trade date assigned was December 6.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Friday as speculators took positive cues from CBOT soybean futures in Asian hours. The benchmark September 2008 soybean contract settled RMB61 higher at RMB4,350 a metric tonne after trading between RMB4,292 and RMB4,386/tonne.

 

Cash soybean prices in China's major producing regions were little changed in the week ended Friday on concerns over the government's determination to tame record high grain prices.

 

Crude palm oil futures traded on Malaysia's derivatives exchange rose Friday, tracking crude oil futures, but ended off highs on expectations of higher palm oil stocks, trade participants said. The benchmark February contract ended MYR20 higher at MYR2,870/tonne, close to the intraday low of MYR2,869/tonne.