December 13, 2007

 

CBOT Soy Outlook on Thursday: 2-4 cents higher on follow through buying

 

 

Chicago Board of Trade soybean futures are expected to open 2-to-4 cents higher Thursday as follow through technical and speculative buying is expected to supply support to prices at the opening of day session trading, analysts said.

 

In overnight e-CBOT trading, January gained 1 1/4 cents to US$11.52 3/4 per bushel. e-CBOT volume in January was 3,830 contracts.

 

Soybeans continue to be driven by speculative and technical considerations, a commission house analyst said. Speculative money continues to enter commodities and soybeans are benefiting, making new contract highs on a daily basis. It's a technically driven market and reaching new contract highs is increasing buying interest to the upside, the analyst added.

 

Weekly export sales were above expectations and the U.S. Department of Agriculture announced a sale of 100,000 metric tonnes of soybeans was sold to South Korea, which should add to the positive tone of the market, a trader said.

 

The USDA reported that weekly soybean export sales totaled 972,000 metric tonnes for the week ended Dec. 6, above the 600,000-to-850,000 metric tonnes expected. China, Taiwan and Turkey were the largest buyers on the week.

 

Hot and dry weather in Argentina might also supply support to prices, the trader added.

 

Dry weather is expected Thursday in western growing areas of the country, before rain is expected on Friday and Saturday, DTN Meteorlogix Weather said. Beyond Saturday, dry weather is forecast through Tuesday, Meteorlogix Weather said.

 

On daily technical charts, January soybeans closed higher, hit another fresh contract high and reached a new 34-year high, a technical analyst said. Market bulls have the solid near-term technical advantage and there are no solid technical clues that a market top is at hand, the analyst said. However, short-term, prices are now overbought technically and due for a downside correction, the analyst added.

 

The next major upside price objective is to push and close prices above US$12.00 per bushel, while the next downside price objective is closing prices below strong support at US$11.26. First resistance is seen at the contract high of US$11.71 1/2 and then at US$11.80. First support is seen at US$11.52, Wednesday's low and then at US$11.40.

 

In overseas markets, crude palm oil futures settled higher. The benchmark February contract on the Bursa Malaysia Derivative Exchange ended up MYR34 lat MYR2,920/tonne.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange settled higher following the rally in CBOT futures to new contract and fresh 34-year highs. The benchmark September 2008 contract jumped RMB78 higher at RMB4,506 per metric tonne.