January 14, 2010

 

CBOT Soy Outlook on Thursday: Seen lower following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session with modest declines, following the overnight theme.

 

CBOT soybean futures are seen starting 3 cents to 5 cents lower. In overnight trade, January soybeans were 5 1/2 cents lower at US$9.64, and March soybeans were 3 cents lower at US$9.75.

 

"The market has a bearish slant to it, and traders seem keen on selling rallies, particularly after index fund buying boosted prices on Wednesday's close," a CBOT floor analyst said.

 

However, futures have absorbed some sharp declines in the past week, and with strong weekly export sales and monthly crush data supporting prices, downside pressure maybe tempered, said Victor Lespinasse, analyst with Grainanalyst.com.

 

Nevertheless, traders are leery of pushing prices in the face of a record South American production forecasts, but with index fund rebalancing buying scheduled to finish today, sellers are seen taking a cautious approach as well.

 

A market technician said first resistance for March soybeans is seen at Wednesday's high of US$9.93 3/4 and then at US$10.00. First support is seen at US$9.80 and then at Wednesday's low of US$9.71 1/2.

 

Thursday is the last trading day for January futures. The contracts expire at 1:00 p.m., EST.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 754,100 metric tonnes for the week ended Jan. 7, with China as the primary buyer at 528,100 tonnes. Analysts had forecast sales between 600,000 and 800,000 metric tonnes.

 

USDA reported 1,623,100 metric tonnes were shipped in the week ended Jan.7, up 38% from the previous week and up 28% from the prior four-week average. The primary destination was China with 985,600 metric tonnes.

 

Soymeal sales were a net 357,000 tonnes. Trade estimates ranged from 75,000 to 200,000 tonnes. Soyoil commitments were 50,000 metric tonnes, a marketing year high. Analysts had forecast sales between 5,000 and 10,000 tonnes.

 

The National Oilseed Processors Association said 164.4 million bushels of soybeans were crushed in December. That's up from 160.3 million in November and above the average analyst estimate of 161.1 million. The crush was driven by demand for soymeal amid the good export program for meal in December, said Dan Cekander, analyst with Newedge. Soyoil stocks were pegged at 2.594 billion pounds, up from 2.411 billion in November and above the average analyst estimate of 2.508 billion.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, tracking Wednesday's rise on CBOT. The September 2010 soybean contract settled RMB14 or 0.4% higher at RMB3,931 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday due to speculation that exports during the period Jan. 1-15 may rise from a month earlier, trade participants said. The March CPO contract on the Bursa Malaysia Derivatives ended up MYR20 at MYR2,530 a metric tonne.