July 26, 2007

 

CBOT Soy Outlook on Thursday: Up 7-9 cents; e-CBOT, western Midwest weather

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's session on firm footing, taking its cue from overnight trade, with concerns over dryness in the western Midwest an underpinning feature, analysts said.

 

CBOT soybean futures are called to start the session 7 to 9 cents higher.

 

In overnight e-CBOT trading, August soybeans were 8 1/2 cents higher at US$8.23 1/2 per bushel, and November was 8 3/4 cents higher at US$8.48.

 

Weather remains the key driver at this point, as soybeans move into their critical pod filling stage of development, analysts said. The western third of the Midwest is an area of concern, with conditions seen warmer and drier-than-normal for crops already suffering from below normal soil moisture, analysts added.

 

The DTN Meteorlogix Weather Service forecast reduced the rain forecast for the west part of the western Midwest during the next 24-48 hours.

 

Higher Malaysian palm oil and crude oil futures are seen lending support to the higher tone, traders said. However, technicals will play a key role in direction as well, with traders watching underlying support levels for signs of additional speculative fund liquidation, a CBOT floor analyst said.

 

A technical analyst said the next downside price objective for November soybeans is closing prices below solid support at this week's low of US$8.34. The next upside price objective is closing prices above solid technical resistance at US$8.69 1/2, which would fill on the upside this week's downside price gap on the daily bar chart.

 

First resistance for November soybeans is seen at Wednesday's high of US$8.49 1/2 and then at US$8.53. First support is seen at Wednesday's low of US$8.38 1/2 and then at US$8.34.

 

There is a chance for thundershowers to develop in the northern section of the western Midwest late Thursday, Meteorlogix reports. Scattered thundershowers move southward during overnight and Friday. Showers may linger in the south Saturday. Temperatures will average above normal Thursday with highs in the low to middle 90s Fahrenheit, near to above normal Friday and Saturday. Mainly dry conditions are in store for the region during Sunday and Monday, with temperatures averaging near to above normal Sunday, above normal Monday, Meteorlogix reports.

 

In the eastern Midwest, a chance for scattered showers and a few thundershowers are seen for late Thursday for the eastern and far northern locations of the region. A chance for scattered showers and thundershowers through much of the region is on tap for Friday, with showers lingering near the Ohio River early Saturday. Temperatures will average near to above normal west and below normal east Thursday, near to above normal Friday, near to below normal Saturday, Meteorlogix forecasts.

 

The Census Bureau reported soybean crushings in June totaled 147.7 million bushels. The figure was in line with the average survey estimate of 148.8 million bushels, down from May's 151.9 million and above last year's 137.4 million. Soyoil stocks rose to 3.389 billion pounds from May's 3.310 billion. The average of survey estimates was 3.314 billion pounds. Soymeal stocks were reported at 317,064 short tonnes. The stock figure was up from May's 279,176 but below the average estimate of 322,800 thousand tonnes.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 316,800 metric tonnes for the week ended July 19. Included in the total were sales of 288,400 metric tonnes for the 2006-07 marketing year. The 2006-07 sales were primarily for Japan with 114,000 metric tonnes, Taiwan with 65,400 tonnes and China with 60,000 tonnes. Analysts had forecast sales between 100,000 and 500,000 metric tonnes. Soymeal sales were a net 112,100 tonnes, and soyoil commitments were 31,500 metric tonnes.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday, boosted by a rally in crude oil prices and an upbeat demand outlook. The benchmark October contract on Bursa Malaysia Derivatives ended at MYR2,568 a metric tonne, up MYR47 from Wednesday.

 

In Singapore's Joint Asian Derivatives Exchange, traded volume remained thin at 3 lots. At 1000 GMT, the November contract was up US$19.25 at US$744.25/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, helped by expectations of lower supplies. The benchmark January 2008 soybean contract settled RMB25 higher at RMB3,306 a metric tonne.