June 26, 2008
CBOT Soy Outlook on Thursday: Up 5-8 cents on weather concerns, uncertainties
Chicago Board of Trade soybean futures are seen starting Thursday's day session higher, continuing the overnight theme on weather concerns and market uncertainties, analysts said.
CBOT soybean futures are called to start the session 5 to 8 cents higher.
In overnight electronic trading, July soybeans were 7 cents higher at US$15.44 1/2 and November soybeans were 5 cents higher at US$15.30. December soyoil was 1 point higher at 65.99 cents per pound and December soymeal was US$0.70 higher at US$396.90 per short tonne.
The market is poised for a higher start, with worries over crop conditions and the potential for lost acreage due to heavy rains moving through the Midwest enticing traders to add risk premium to prices, analysts said.
The DTN Meteorlogix weather forecast said the Midwest continues to experience an active weather pattern. There should be frequent periods with thunderstorms and only minor, 1-3 day periods, of drier weather. Some heat is seen ahead of systems but also some fairly cool conditions is seen behind systems. There is some risk for local flooding, as well as risk for crop quality problems.
The uncertainty of acreage and demand remain underlying themes to keep volatility in the market place, a CBOT floor broker said.
Supportive outside market influences, with higher crude oil prices and a weaker U.S. dollar, are seen attracting speculative buying. Technical strength is expected to produce follow through buying from Wednesday, but traders said participants will be on guard for selling to emerge on any sign of upside exhaustion as traders look to book end-of-month and quarter profits, a floor broker add.
A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at the contract high of US$15.66 3/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at this week's low of US$14.73 3/4.
First resistance for November soybeans is seen at Wednesday's high of US$15.26 1/4 and then at US$15.41 1/4. First support is seen at US$15.00 and then at Wednesday's low of US$14.80 1/2.
The U.S. Department of Agriculture reported total weekly soybean export sales for the 2007-08 crop year at a net sales reduction of 268,100 tonnes for the week ended June 19. 2008-09 marketing year sales were 2,289,400 tonnes. The new crop sales were primarily for China with 2,240,000 metric tonnes. Analysts had forecast new crop sales between 2,240,000 and 2,500,000 metric tonnes. Old crop sales were forecast in range of a net sales reduction of 300,000 metric tonnes to 150,000 tonnes.
Soymeal sales were a net 73,000 tonnes, below trade estimates of 75,000 to 175,000 tonnes. Soyoil commitments were 20,300 metric tonnes, above trade estimates of zero to 10,000 tonnes.
USDA also announced Thursday that U.S. private exporters sold 120,000 metric tonnes of soybeans for delivery to China in the 2008-09 marketing year.
The U.S. Census Bureau pegged the May soybean crush at 150.4 million bushels, up from the April crush figure of 147.4 million bushels. In a survey of analysts, the average of estimates was 152.8 million bushels. May soymeal stocks were reported at 431,528 short tonnes, up from the 339,944 tonnes in April, as well as above the average of estimates at 310,800. Soyoil stocks came in at 2.971 billion pounds, up from April stocks of 2.922 billion, but below the average estimate of 2.995 billion pounds.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply up Thursday, tracking overnight gains in CBOT soybean futures. The benchmark January 2009 soybean contract rose 2.4% to settle at RMB5,043 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday in thin, lackluster trade, trade participants said. The benchmark September contract on the Bursa Malaysia Derivatives ended MYR3 down at MYR3,535 a metric tonne, off the intraday high of MYR3,570/tonne.