December 28, 2007

 

CBOT Soy Outlook on Friday: Firmer start expected on e-CBOT prices

 

 

Stronger overnight values and a strong uptrend for soybeans are expected to lift the oilseed complex Friday at the Chicago Board of Trade.

 

Most-active March soybeans are called to open 10-12 cents a bushel higher. In electronic e-cbot trade, March soybeans rose 11 1/2 cents to US$12.43 and nearby January rose 12 1/2 cents to US$12.25.

 

Soybeans rebounded smartly from Thursday's losses as concerns for dryness in long-range forecasts in Argentina continue, resuming their uptrend.

 

DTN Meteorlogix weather firm said a few thunderstorms have developed overnight in Argentina's northern La Pampa and in Cordoba. The forecast calls for a chance for a few more afternoon thundershowers Friday for Cordoba and also for Sante Fe province. The longer-term outlook remains warm and dry.

 

The U.S. Department of Agriculture released export sales for the week ended Dec. 20 on Friday. The government said soybean sales for 2006-07 were 683,100 metric tonnes. This compared to trade estimates of 500,000 to 900,000 tonnes. The sales report was delayed one day because of the Christmas holiday.

 

USDA said the sales total was 22% under the previous week and 27% below the prior 4-week average. The biggest sale went to unknown destinations, which totaled 277,800 tonnes, and to China, which bought 137,800 tonnes. In addition, 55,000 tonnes of optional origin sales were reported for China.

 

John Kleist of Kleist Ag Consulting said China's visible purchase was the lowest in about five weeks. "The unknown purchases could be China, but what the report shows is we have a variety of buyers who are trying to get supplies booked. So we can't blame the rally all on Chinese demand," he said.

 

Export sales for soymeal were 73,300 tonnes, a marketing-year low, USDA said. The sales were 35% below the previous week and 43% under the prior 4-week average. Trade estimates were for sales of 75,000 to 150,000 tonnes.

 

Soyoil sales totaled 13,200 tonnes, compared to expectations of 5,000 to 20,000 tonnes. Kleist said judging by the export business, the soyoil-soymeal spreads should be a feature Friday.

 

Friday is the last full trading day of 2007. The CBOT closes trade early on Monday and is shuttered Tuesday for New Year's Day.

 

A technical analyst said for bullish traders, resistance at US$12.45 1/2 now remains the key objective for the bulls. A break through that ceiling will open the door towards psychological resistance at the US$12.50 a bushel level.

 

If soybeans can take that out, the market is within striking distance of the 1973 high at US$12.90. Support rests at US$12.09 and US$12.

 

In other news, crude palm oil futures on Bursa Malaysia Derivatives were firmer. The benchmark March contract gained MYR28 to MYR3,125 a metric tonne after reaching an intraday high of MYR3,141/tonne, a record high. Bullish sentiment and adverse weather in palm oil-growing regions are supporting prices.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday on strong soyoil prices, but the benchmark September 2008 soybean contract settled RMB8 lower at 4,686 a metric tonne.

 

Rotterdam soybean prices were weaker and soymeal prices were mostly weaker. European vegoil prices were also generally weaker.