January 16, 2009

 

CBOT Soy Outlook on Friday: Seen up on fundamentals, outside markets

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session higher, underpinned by bullish fundamentals and supportive outside market influences.

 

CBOT soybean futures are called 12 cents to 15 cents higher.

 

In overnight electronic trading, March soybeans finished 15 1/4 cents higher at US$10.09 3/4. March soymeal was US$6.40 higher at US$311.40 per short tonne, while March soyoil ended 35 points higher at 34.75 cents per pound.

 

Outlooks for inadequate rainfall in Argentina that raise the potential for reduced production prospects coupled with bullish outside forces set the stage for higher price action in early trade, analysts said.

 

The U.S. dollar is weaker in early trade, and equities and crude oil futures are pointing higher.

 

U.S. soy markets have a three-day weekend coming up and with the weather in Argentina seen stressful next week, analysts expect traders to cover positions, especially short positions heading into the weekend.

 

Monday is the Martin Luther King, Jr. holiday. Soy complex markets will have regular hours on Friday, but will be closed Sunday night and during the day Monday and open for electronic trading at 7 PM EST Monday.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices back above solid technical resistance at this week's high of US$10.60 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at Thursday's low of US$9.57 3/4 a bushel.

 

First resistance for March soybeans is seen at US$10.00 and then at Thursday's high of US$10.25. First support is seen at US$9.90 and then at US$9.75.

 

The DTN Meteorlogix weather outlook said dry weather and episodes of hot temperatures increase stress on developing soybeans in Argentina. Some showers and thunderstorms are expected over the weekend but not enough to provide significant relief to crops. Mostly dry conditions and above to much above normal temperatures are indicated for next week.

 

In other news, China is expected to import 3.05 million metric tonnes of soybeans in January, according to an initial estimate by the Ministry of Commerce. The estimate was based on importers' reports during Dec. 16-Dec. 31, the ministry said in report dated Wednesday. The regular forecast is usually lower than actuals as it doesn't include all cargoes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher in thin trading volume Friday, tracking gains at CBOT Thursday. The benchmark September 2009 soybean contract gained RMB54, or 1.6%, to settle at RMB3,449/tonne.

 

Cash soybean prices in China's major producing areas edged up in the week to Friday alongside gains in soymeal prices ahead of the Chinese New Year holiday as soyoil prices slipped slightly.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday, taking leads from a positive price forecast and gains in soyoil. The new benchmark April contract on Bursa Malaysia Derivatives ended MYR28 close to an intraday high of MYR1,840.