December 20, 2007

 

CBOT Soy Outlook on Thursday: Steady, firm; e-CBOT, underlying demand

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's day session with a steady to firmer undertone, taking its cue from the overnight session and solid underlying demand.

 

CBOT soybean futures are called to start the session flat to 2 cents higher.

 

In overnight e-CBOT trading, January soybeans were 3/4 cent higher at US$11.59 3/4 per bushel, and March soybeans were 1/4 cent higher at US$11.78.

 

The slightly higher finish to the overnight session is pointing to a similar opening to day session trade, with solid weekly export sales and monthly crush data providing supportive inputs, analysts said.

 

Bullish longer range fundamental outlooks continue to keep a supportive tone in the market place, but with end of the year positioning and a lack of any fresh bullish news of significance, profit taking is seen keeping prices range bound, analysts added.

 

Nevertheless, the market continues to have a mindset of buying breaks and with uncertainties still surrounding South American crops, tight projected domestic stocks and good global demand, downside pressure seems limited, a CBOT floor analyst said.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices above solid chart resistance at the contract high of US$11.83 a bushel. The next downside price objective is closing prices below solid technical support at US$11.50.

 

First resistance for March soybeans is seen at Wednesday's high of US$11.79 and then at US$11.83. First support is seen at Wednesday's low of US$11.71 and then at this week's low of US$11.65.

 

U.S. Department of Agriculture reported weekly soybean export sales were 929,600 metric tonnes for the week ended Dec 13. 2007-08 marketing year sales totaled 872,400 metric tons. The sales were primarily for China with 245,200 metric tons, Mexico with 189,500 tons, and South Korea with 100,000 tons. Analysts had forecast sales between 600,000 and 900,000 metric tons. Soymeal sales were a net 111,800 tons, and soyoil commitments were 100,000 metric tons.

 

Meanwhile, private exporters reported to the USDA export sales of 165,000 metric tons of soybeans for delivery to unknown destinations during the 2007-2008 marketing year, the USDA said Thursday.

 

The U.S. Census Bureau pegged the November crush at 156.644 million bushels, down from the October crush figure of 164.0 million bushels. In a survey of analysts, the average estimates were 155.2 million bushels. November soymeal stocks were reported at 313,798 short tons, up from the 313,330 tons in October, as well as above the average of estimates at 278,000. Soyoil stocks came in at 3.041 billion pounds, down slightly from October stocks of 3.049 billion, and below the average estimate of 3.052 billion pounds.

 

The DTN Meteorlogix Weather Service said the long range outlook for Brazil's Rio Grande do Sul features an increased chance for rain Thursday. Should this occur it would most likely maintain favorable growing conditions.

 

In Argentina, very hot weather Thursday and Friday increases stress to crops. Scattered thunderstorms Sunday into Monday will help to ease stress, except it is uncertain whether or not this rainfall will hit La Pampa, Meteorlogix added.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly up Thursday on short-covering, following gains in CBOT soybean futures Wednesday. The benchmark September 2008 soybean contract rose RMB4 to settle at RMB4,447 a metric ton, after trading between RMB4,430/ton and RMB4,462/ton.