December 8, 2005
CBOT Soy Outlook on Thursday: Up on export sales, carryover buying
Soybean futures at the Chicago Board of Trade are expected to begin Thursday's open auction session with a firm undertone, supported by higher than expected weekly export sales and carryover momentum from Wednesday's late strength.
Analysts call soybeans to open 2 to 4 cents per bushel higher.
In overnight electronic trade, January soybeans were 2 3/4 cents higher at US$5.61 3/4, January soymeal was unchanged at US$173.30 and January soyoil was 2 points higher at 21.21 cents per pound.
A week of strong export sales, with China a big buyer is seen underpinning prices, as downside pressure showed signs of exhaustion after satisfying near term technical objectives Wednesday, analysts said.
U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 952,100 tonnes. The primary buyer was China at 523,000 tonnes. 2006-07 sales totaled 120,000 tonnes. Pre-report estimates ranged from 400,000 to 600,000 tonnes.
Soymeal sales were 272,400 tonnes, a figure well above estimates that ranged from 75,000 to 125,000 tonnes. Net sales of 14,500 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 3,000 to 8,000 tonnes.
Light support from higher gold and crude oil markets, firm cash prices as well as position evening ahead of Friday's supply and demand report opens the door for price strength.
Nevertheless, bearish fundamental outlooks remain a hindrance to sustained rallies, as outlooks for growing ending inventory forecasts and generally favorable South American crop conditions limit upside potential, traders add.
Market technicians said first resistance for January soybeans is seen at US$5.63 - Wednesday's high - and then at US$5.70. First support is seen at US$5.53 1/2 - Wednesday's low - and then at US$5.50.
The average of estimates from analysts surveyed by Dow Jones Newswires pegs the 2005-06 U.S. soybean carryout at 386 million bushels, from a range of 337 million to 450 million. The USDA is scheduled to release its latest carryout projections in its supply and demand report Friday at 8:30 a.m. EST.
The DTN Meteorlogix Weather Service said conditions across Brazilian growing areas will be drier through southern crop areas during the next 5-7 days before some chance for showers reemerge. In Argentina, no widespread shower activity is expected during the next 7 days.
A total of 642 delivery notices were redelivered against the December soyoil contract, with issuers and stoppers scattered among various firms. The last date assigned was Dec. 7.
Meanwhile, a poultry worker in northeast China has tested positive for the H5N1 virus (bird flu), the government said Thursday, making her the country's fifth confirmed human case of the disease.
In overseas markets, most soybean futures traded on China's Dalian Commodity Exchange settled slightly lower Thursday, in line with a small drop in CBOT soybeans Wednesday. The benchmark May 2006 soybean contract gave up RMB4 to settle at RMB2,551 a metric tonne, after trading between RMB2,543/tonne and RMB2,562/tonne.
Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally lower Thursday after another dull, range bound trading day. The benchmark February CPO contract ended at MYR1,410 a metric tonne, down MYR3 from Wednesday after moving between MYR1,404/tonne and MYR1,413/tonne.
Rotterdam soybeans and soymeal prices were mostly lower, and European vegoils were mixed.
