January 22, 2010

 

CBOT Soy Outlook on Friday: Down 1-3 cents; following overnight theme

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session modestly lower, following the overnight theme with bearish outside markets influencing prices.

 

In overnight trade, March soybeans were 1 3/4 cents or 0.18% lower at US$9.52 1/4, and May soybeans were 2 1/4 cents or 0.23% lower at US$9.58 3/4.

 

Broad weakness across asset classes are lending weight to soybean futures, with bearish production forecasts for South American crops providing fundamental pressure as well, analysts said.

 

Fears of reduced fund activity as a result of U.S. President Obama's stance against banks are seen aiding the defensive posture of a market already in a 2 week downturn, a CBOT floor analyst said.

 

However, support is seen from solid weekly export sales serving as a sign of resurgent demand following the large drop in prices.

 

The market is seen taking on a choppy tone heading into the weekend, with oversold conditions expected to offset some selling pressure, traders said.

 

A technical analyst said first resistance for March soybeans is seen at Thursday's high of US$9.59 1/2 and then at US$9.71. First support is seen at Thursday's low of US$9.48 1/2 and then at this week's low of US$9.40 3/4.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 990,600 metric tonnes for the week ended Jan. 14, with 929,600 tonnes sold for delivery in the 2009-10 marketing year. The primary buyer was China at 700,400 metric tonnes. Analysts had forecast sales between 700,000 and 1,000,000 metric tonnes.

 

USDA reported 1,546,600 metric tonnes were shipped in the week ended Jan. 14, down 5% from the previous week but up 22% from the prior four-week average. The primary destination was China with 859,600 metric tonnes.

 

Soymeal sales were a net 417,600 tonnes. Trade estimates ranged from 150,000 to 300,000 tonnes. Soyoil commitments were 10,400 metric tonnes. Analysts had forecast sales between 10,000 and 20,000 tonnes.

 

In overseas markets, soybean futures fell on the Dalian Commodity Exchange Friday, weighed by supply concerns and worries across the commodity complex over monetary policy tightening. The September soybean contract settled 0.2% lower at RMB3,872 a metric tonne.

 

Cash soybean prices in China's major producing areas dropped slightly in the week ended Friday, as large supplies from record imports weighed on prices.

 

China's soybean imports in January are likely to reach 3.6 million metric tonnes, according to a report by the Ministry of Commerce Friday. The country imported 4.78 million tonnes of soybeans in December 2009.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday following profit-taking amid fears over tightening of monetary policy by China's and a broad-based selloff in most asset classes. The April CPO contract on the Bursa Malaysia Derivatives ended MYR33 or 1.3% lower at MYR2,488 a metric tonne.