By Andrew Johnson Jr.
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–Soybean futures are expected to begin Thursday’s day
session higher, buoyed by follow through buying from Wednesday.
Strength in overnight trade is serving as an early signal of price
direction. Soybeans are seen 2 cents to 4 cents higher.
Overnight, Chicago Board of Trade July soybeans were 3 cents higher at $9.60
3/4, and November soybeans were 4 cents higher at $9.28 1/2.
The absence of fresh news and mixed signals from outside markets are
allowing futures to feed off the momentum from Wednesday’s gains.
Lingering talk of Chinese interest in buying U.S. and Argentine soybeans and
concerns about lost Canadian canola acreage serve as underlying supportive
features, analysts said. The market will also draw support from worries about
continued rains in saturated soybean areas of the U.S. threatening the health
of young plants and delaying the final seedings of the 2010 crop.
Meanwhile, firm cash prices on scarce farmer selling of stored soybeans
remains a bullish feature limiting downside risks. Nevertheless, analysts
anticipate a choppy session, as the market struggles to find momentum in the
absence of a fresh fundamental directive.
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–Technical buying and strong export demand are expected
to boost U.S. wheat futures early Thursday, with traders keeping an eye on
weather in the Plains and Canada.
Wheat on the Chicago Board of Trade is called to open 2 to 4 cents a bushel
higher. In overnight electronic trading, CBOT September wheat rose 1 3/4 cents,
or 0.4%, to $4.78 1/2, and CBOT December wheat gained 2 3/4 cents, or 0.5%, to
$5.07 1/4.
Trend-following funds’ large net short position in CBOT wheat continues to
look supportive because it leaves the market vulnerable to bursts of short
covering, in which participants buy back previously sold positions, traders
said. Funds are short about 43,000 to 45,000 contracts, a CBOT trader said.
Weekly U.S. wheat export sales of 959,500 tons exceeded trade expectations
of 150,000 to 350,000 tons. Demand primarily came from Latin America, including
196,300 tons sold to Mexico and 140,000 tons sold to Peru, according to the
U.S. Department of Agriculture.
Traders are keeping an eye on weather in the U.S. central and southern
Plains because heavy rains have stalled the hard red winter wheat harvest this
week. A trend toward drier and hotter weather during the next five to seven
days will help improve conditions for harvest and crop development, but there
are signs that favorable conditions won’t last, according to private weather
firm DTN/Meteorlogix.
In Canada, excessive rains have slowed planting and raised worries about
reduced acreage and production. Rain and strong winds through the southern and
eastern Canadian Prairies on Thursday and Friday “will delay and disrupt any
late planting or replanting of crops in these locations and could promote more
flooding,” Meteorlogix said.