December 21, 2006

 

CBOT Soy Outlook on Thursday: Seen up 3-5 cents; following overnight trends

 

 

Chicago Board of Trade soybean futures are seen beginning Thursday's day session on firm footing, reflecting overnight trends, but futures are expected to remain within recent trading ranges amid the absence of fresh directives, analysts said.

 

Soybean futures are called to open 3 to 5 cents higher.

 

In e-CBOT trade, January soybeans were 5 cents higher at US$6.53 1/4 and March was 4 cents higher at US$6.67 1/2 per bushel.

 

The market was technically strong overnight, palm oil futures rallied on weather concerns and with export sales mildly supportive, futures are poised for a higher start, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

However, analysts expect prices to jockey back and forth within recent ranges as speculative fund demand continues to ebb and flow, and with the absence of any threatening weather conditions in South America the trade is not expected produce any substantial rallies, analysts added.

 

A technical analyst said the next upside price objective for January soybeans is to close prices above solid resistance at US$6.70 a bushel. The next downside price objective is closing prices below solid support at this week's low of US$6.43.

 

First resistance for January soybeans is seen at US$6.50 and then at Wednesday's high of US$6.55. First support is seen at Wednesday's low of US$6.46 3/4 and then at US$6.43.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 742,000 metric tonnes. Trade estimates called for commitments in the 550,000 to 900,000 tonne range. The biggest buyers were China buying 235,200 tonnes and Spain, buying 121,600 tonnes.

 

Soymeal sales were 117,700 tonnes. Analysts' estimates called for commitments in a range of 75,000 to 175,000 tonnes. Soyoil 2006-07 sales were 6,400 tonnes, while the trade guess was 5,000 to 15,000 tonnes.

 

USDA said private exporters reported the sale of 120,000 metric tonnes of soybeans to China for delivery in the 2006/2007 marketing year, the USDA said Thursday.

 

The Census Bureau put the November crush at 155 million bushels, on par with the average of estimates from a Dow Jones Newswires survey of analysts. Soyoil stocks were put at 3.096 billion pounds compared to the average estimate of 3.026 billion pounds. Soymeal stocks were 373,563 short tonnes, in line with the analyst estimate of 373,500.

 

The DTN Meteorlogix weather forecast said periodic scattered thunderstorm activity and warm to hot temperatures will favor developing crops in Argentina. In Brazil, southern crop areas will benefit from widespread rain and thunderstorms during the next 3-5 days.

 

Rotterdam soybeans were lower and soymeal were mixed. European vegoils were also mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher on long buying, analysts said. The benchmark May 2007 contract settled RMB13 higher at RMB2,832 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday, with concerns about floods potentially disrupting supply providing the only highlight in an otherwise unexciting trading day, analysts said. The March CPO contract ended up MYR14 at MYR1,882 a metric tonne.