July 31, 2008

 

CBOT Soy Outlook on Thursday: Lower on overnight theme, weather outlook

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session lower, in step with overnight price action, retreating on less threatening weather outlooks for developing crops and ideas Wednesday's late rally was overdone.

 

CBOT soybean futures are called 7 to 9 cents lower.

 

In overnight electronic trading, August soybeans were 4 cents lower at US$13.90 and November soybeans were 9 cents lower at US$13.96. December soyoil was 34 points lower at 59.14 cents per pound and December soymeal was US$2.60 lower at US$373.60 per short tonne.

 

The weather forecast continues to point to stressful heat moving into the Midwest during the weekend, but cooler temperatures and improved rain chances are seen quickly returning early next week, analysts said.

 

Weather remains the dominant feature in the market place, and with less of a concern for heat seen, traders expect futures will trim premium put in Wednesday, analysts added.

 

Prices are expected to remain confined within a recent trading range, jockeying back and forth on weather outlooks and outside market influences, until a better picture of yield and acreage can be established, a CBOT floor analyst said.

 

However, a higher tone in outside inflationary markets at the printing of this commentary, supportive weekly export sales, lingering worries about crop stress in the U.S. Delta and a tight balance table will remain underpinning features.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at US$14.50 a bushel. The next downside price objective is pushing and closing prices below solid technical support at this week's low of US$13.51.

 

First resistance for November soybeans is seen at Wednesday's high of US$14.08 and then at this week's high of US$14.21. First support is seen at Wednesday's low of US$13.70 1/4 and then at US$13.51.

 

The DTN Meteorlogix weather forecast sees generally favorable weather for flowering soybeans with no persistent hot or dry weather indicated. A brief period of temperatures reaching the middle 90s Fahrenheit is possible over the weekend or early next week before scattered showers and thunderstorms and cooler temperatures return.

 

The U.S. Delta will continue to experience above to much above normal temperatures and below normal rainfall near term, Meteorlogix reports.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 707,600 metric tonnes. Analysts had forecast sales between 250,000 and 450,000 metric tonnes. Net sales for the 2007-08 crop year totaled 271,600 tonnes for the week ended July 24. The 2007-08 sales were primarily for China with 134,600 metric tonnes. Sales for the 2008-09 marketing year were 436,000 tonnes, with the primary buyers unknown destinations with 230,000 tonnes and China with 180,000 tonnes.

 

Soymeal sales were a net 103,900 tonnes, within trade estimates of 50,000 to 100,000 tonnes. Soyoil commitments were a net 12,400 metric tonnes. Analysts had forecast sales between 5,000 and 20,000 tonnes.

 

In deliveries, August soybean deliveries totaled 66 lots. The house account at ADM Investor Services issued 64 lots from their Lacon, Illinois facility. The last trade date assigned was June 11.

 

In overseas markets,China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, tracking gains on CBOT Wednesday. The benchmark January 2009 contract settled RMB39 higher at RMB4,547 a metric tonne, or up 0.9%, after trading in a RMB4,533-RMB4,568/tonne range.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday as exports surged, and on higher crude oil prices, said trade participants. The benchmark October contract on Bursa Malaysia Derivatives ended MYR58 higher at MYR3,050 a metric tonne.
   

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