December 14, 2007

 

CBOT Soy Outlook on Friday: Up 3-5 cents; e-CBOT strength, technical support

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session higher, buoyed by technical buying, supportive energy bill news and lingering dryness issues for parts of Argentina.

 

CBOT soybean futures are called to start the session 3 to 5 cents higher.

 

In overnight e-CBOT trading, January soybeans were 5 cents higher at US$11.51 per bushel, and March soybeans were 3 1/2 cents higher at US$11.69 1/2. The higher overnight theme is seen carrying over into day session trade, as technical strength remains a key driver of prices, as the market continues to probe new highs, analysts said.

 

The passage of an energy bill by the U.S. senate that calls for increased biofuel use is long term supportive and dryness concerns in Argentina remains an underpinning feature in the market, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

However, a stronger U.S. dollar early Friday may serve to temper upside movement, with the potential for end-of-the week profit taking watched as outside metal futures slip lower, analysts added.

 

A technical analyst said prices are still short-term overbought, technically, and due for a downside correction very soon. The next upside price objective for March soybeans is to push and close prices above psychological resistance at US$12.00 a bushel. The next downside price objective is closing prices below solid technical support at US$11.26.

 

First resistance for March soybeans is seen at Thursday's contract high of US$11.79 and then at US$12.00. First support is seen at Thursday's low of US$11.63 and then at US$11.52.

 

Friday is the last trading day for December soyoil and soymeal futures.

 

The National Oilseed Processors Association said Friday its November soybean crush rate was 146.748 million bushels. That was down from the October figure of 154.974 million bushels and lower than the 148.198 million at the same period last year. The average of estimates from analysts surveyed by Dow Jones Newswires was 151.0 million. Soyoil stocks were reported at 2.689 billion pounds. The stocks were up from the October stock figure of 2.679 billion, and above the average of estimates at 2.680 billion.

 

The U.S. Senate on Thursday voted to pass a new scaled back energy bill, providing new fuel-efficiency standards. Also under the legislation, 36 billion gallons of so-called renewable fuel would be blended into the fuel supply by 2022. Of the 36 billion gallons, 21 billion gallons would have to come from sources other than corn, such as wood chips.

 

The DTN Meteorlogix Weather Service said it was another hot day in Argentina Thursday before thunderstorms broke. The storms appeared to be heavier and more widespread than expected. This should help to ease dryness concerns, even in the west. Friday's long range charts also suggest a better chance for thundershowers but this outlook is somewhat uncertain, Meteorlogix added.

 

In deliveries, December soyoil deliveries totaled 79 lots. Issuers were scattered among various commission houses, while a customer account at RJ O'Brien stopped all 79 lots. The last trade date assigned was December 12.

 

December soymeal deliveries totaled 16 lots. The house account at ADM Investor Services stopped 11 lots, with a customer accounts at Astro Division of UBS Securities issued 16. The last trade date assigned was December 11.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Friday after Chicago Board of Trade soybeans fell overnight. The benchmark September 2008 soybean contract settled RMB32 lower at RMB4,474 a metric tonne.

 

Cash soybean prices in China's major producing regions were mostly stable in the week to Friday, but prices were higher in some areas as farmers were reluctant to sell.

 

Crude palm oil futures on Malaysia's derivatives exchange ended little changed Friday amid lackluster trading as most participants stayed on the sidelines in the run-up to the holiday season and the impending expiry of December contracts. The benchmark March contract ended unchanged at MYR2,930/tonne, after trading in a narrow band of MYR17.