January 29, 2009

Soybean futures at the Chicago Board of Trade are poised for a lower start to Thursday's day session, following the overnight theme in the absence of fresh bullish news and weakness in outside markets.

 

CBOT soybean futures are called 5 cents to 7 cents lower.

 

In overnight electronic trading, March soybeans finished 7 cents lower at US$9.75 1/2. March soymeal was US$3.00 lower at US$308.50 per short tonne, while March soyoil ended 29 points lower at 32.62 cents per pound.

 

The market lacks any fresh standout bullish news to underpin prices, and with the bearish influence of outside macro markets, futures are lacking early support, said Vic Lespinasse, analyst with Grainanalyst.com.

 

Weather remains a dominant feature, with scattered rains seen moving through parts of Argentina through the weekend, limiting buyer enthusiasm.

 

However, weather forecasts can "change on a dime", opening the door for volatile two-sided trade as participants focus on morning and midday outlooks from private forecasters, Lespinasse added.

 

Otherwise, fresh fundamental news is limited, with the Census crush report failing to provide any surprises and weekly soybean export sales at the low end of estimates.

 

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$10.41 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the January low of US$9.57 3/4 a bushel.

 

First resistance for March soybeans is seen at Wednesday's high of US$9.94 and then at US$10.00. First support is seen at Wednesday's low of US$9.66 and then at US$9.57 3/4.

 

The DTN Meteorlogix forecast said Argentina's weather pattern tends to feature chances for thunderstorms every 4-6 days, but coverage is variable with each chance. It looks like a more favorable weather pattern for Cordoba crop areas, drought conditions will continue for La Pampa and southwest Buenos Aires. The other areas are more uncertain and could go either way.

 

U.S. soybean crushings totaled 141.4 million bushels in December, according to data released by the U.S. Census Bureau Thursday. On average, analysts anticipated a 141.0-million-bushel crush, according to a Dow Jones Newswires survey. Crushings were down from 144.7 million bushels a month earlier and 163.9 million bushels a year earlier. Soymeal stocks for December totaled 415,548 short tonnes, compared to the average estimate of 431,250. Soyoil stocks totaled 2.657 billion pounds. Analysts, on average, expected 2.692 billion pounds.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 532,200 metric tonnes for the week ended Jan. 22. Sales for 2008-09 were a net 526,100 metric tonnes. Analysts had forecast sales between 500,000 and 900,000 metric tonnes. The primary buyer was China with 251,100 metric tonnes.

 

Soymeal sales were a net 201,700 tonnes, at the high end of trade estimates ranging from 75,000 to 200,000 tonnes. Soyoil commitments were 21,500 metric tonnes. Analysts had forecast sales between zero and 15,000 tonnes.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange will be closed until Feb. 1. The exchange is closed for the Chinese New Year holiday.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday tracking weakness in soybean oil and crude oil futures, traders said. The benchmark April contract on the Bursa Malaysia Derivatives ended 37 ringgit lower at MYR1,745 a metric tonne, close to the intraday low of MYR1,739/tonne.