December 14, 2006

 

CBOT Soy Outlook on Thursday: Mixed; weekly exports support

 

 

CBOT soybean futures are seen starting Thursday's day session with a mostly steady undertonnee, as supportive export sales and underlying technical support offset pressure from a lower overnight trend.

 

In e-CBOT trade, January soybeans were 2 cents lower at US$6.59 and March was 1 3/4-cent lower at US$6.74 1/4 per bushel.

 

The market is poised for a steady start, with solid weekly export sales helping prices bounce back from recent declines in the absence of any other fresh fundamental developments, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

However, the market remains in a holiday liquidation mode and two-sided trade is a possibility, Roose added.

 

Technical activity is expected to remain a feature as traders anticipate futures will continue to consolidate between support and resistance levels heading into the year end holidays.

 

A technical analyst said the next upside technical objective for January soybeans is to close prices above solid resistance at US$6.75 3/4 a bushel, which is the top of a downside price gap on the daily bar chart created last week. 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$6.63 1/2 and then at this week's high of US$6.69 1/2. First support is seen at US$6.57 1/2 and then at this week's low of US$6.52 1/4.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 906,000 metric tonnes. Trade estimates called for commitments in the 600,000- to 1,000,000- tonne range. The biggest buyers were China buying 469,800 tonnes and Netherlands, buying 150,300 tonnes.

 

Soymeal sales were 221,000 tonnes. Analysts' estimates called for commitments in a range of 75,000 to 175,000 tonnes. Soyoil 2006-07 sales were 22,100 tonnes, while the trade guess was 5,000 to 20,000 tonnes. China was the primary buyer of 15,000 tonnes.

 

USDA announced private exporters reported the sale of 180,000 metric tonnes of soybeans for delivery to unknown destinations during the 2006-2007 marketing year, Thursday.

 

The National Oilseed Processors Association's Nov Soybean Crush report, scheduled for release at 7:30 a.m. CST today, was delayed until 8:30 a.m. CST.

 

The DTN Meteorlogix weather forecast said hot weather will linger in Argentina during a 5 day period but some shower activity is expected as well. In Brazil, the next chance for scattered thundershowers comes during the middle of next week. It could be very hot at times during the next 5 days, increasing stress to early soybeans, Meteorlogix reports.

 

In deliveries, a total of 241 delivery notices were posted against the December soyoil future. The house account at Term Commodities issued all the lots, with stoppers scattered among firms. The last trade date assigned was Dec. 12. Soymeal delivery notices totaled 703 lots. Issuers and stoppers were widely scattered. The last trade date assigned was Dec. 13.

 

Rotterdam soybeans and soymeal were mixed. European vegoils were flat to lower.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday on light speculative buying, as Wednesday's losses were considered overdone, analysts said. The benchmark May 2007 contract settled RMB15 higher at RMB2,851 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Thursday amid expectations that export data due out Friday would be poor. The benchmark February contract ended at MYR1,855 a metric tonne, down MYR46 from Wednesday.