August 2, 2007

 

CBOT Soy Outlook on Thursday: Seen up 6-8 cents, midwest heat, technical buys

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session on firm footing, taking its cue for overnight trade, with Midwest heat and technical support underpinning features.

 

CBOT soybean futures are called to start the session 6 to 8 cents higher.

 

In overnight e-CBOT trading, August soybeans were 3 3/4 cents higher at US$8.29 1/2 per bushel, and November was 7 3/4 cents higher at US$8.56 1/2.

 

Hot temperatures across the central U.S. at the critical yield developing stage for soybeans is serving as the catalyst for the expected higher theme, as traders remain concerned about weather and its affect on crops, analysts said.

 

Technical strength is expected to add support as well, with traders saying the ability of futures to hold above support levels overnight is seen underpinning prices, analysts add.

 

Nevertheless, the market remains weather sensitive, with morning and midday weather outlooks watched closely for signs of yield potential, a CBOT floor analyst said. The market remains in a sideways trend, with analysts expecting the pattern to continue until more is known about yields, future demand and acreage intentions for South America, he added.

 

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

 

First resistance for November soybeans is seen at US$8.55 and then at US$8.60. First support is seen at Wednesday's low of US$8.47 1/2 and then at US$8.40.

 

The DTN Meteorlogix Weather Service forecast said there is more rain in the forecast for the Midwest over the weekend with amounts of 0.25 to 0.75 inch expected, 0.25- to 1-inch showers are still in the forecast for the western Midwest Monday and Tuesday next week.

 

Episodes of scattered showers and thunderstorms Saturday and again Monday and Tuesday of next week in the western Midwest will benefit soybeans especially in the drier areas, Meteorlogix reports. In the eastern Midwest, scattered showers over the weekend and again during the middle of next week will benefit filling corn and soybeans. However mostly above normal temperatures during the next 7 days will increase soil moisture usage, Meteorlogix forecasts.

 

Deliveries notices posted against August soybean futures totaled 2,202 lots. Customer accounts at Man Professional Clearing issued 823 lots and stopped of 1,028 lots. The last trade date assigned was Aug. 1.

 

Meanwhile, FC Stone released its Aug. 1 U.S. crop production estimates late Wednesday. FC Stone forecast the 2007-08 soybean crop at 2.681 billion bushels with a yield of 42.4 bushels an acre. In the July supply and demand report, USDA estimated 2007 U.S. soybean production at 2.625 billion bushels and a trend line yield of 41.5 bushels per acre. In 2006, U.S. soybean production was 3.188 billion bushels and a yield of 42.7 bushels.

 

USDA reported weekly soybean export sales were 440,300 metric tonnes for the week ended July 26. Included in the total were sales of 255,200 metric tonnes for the 2007-08 marketing year. The 2007-08 sales were primarily for China with 120,000 metric tonnes, and unknown destinations with 55,000 tonnes. Analysts had forecast sales between 50,000 and 600,000 metric tonnes. Soymeal sales were a net 110,400 tonnes, and soyoil commitments were 27,400 metric tonnes.

 

The U.S. Census Bureau released its revised June soyoil stocks figure, holding the June stocks figure virtually unchanged at 3.3893 billion pounds reported July 26. The figure is up from May's stocks of 3.311 billion pounds and above the 2.919 billion pounds reported at the same time last year.

 

In overseas markets, crude palm oil futures on Malaysia's Derivatives Exchange ended moderately higher Thursday in choppy trade as the market struggled for direction amid an uncertain long-term supply and demand outlook. The benchmark October contract settled at MYR2,602 a metric tonne, up MYR17 from Wednesday.

 

In Singapore's Joint Asian Derivatives Exchange, palm oil trading activity remained sluggish, with only 82 lots traded.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Thursday, following Commodity Exchange settled mostly lower Thursday, following Wednesday's losses at CBOT. The benchmark January 2008 soybean contract settled RMB26 lower at RMB3,403 a metric tonne.