January 30, 2009

 

CBOT Soy Outlook on Friday: Steady to up; overnight theme, positioning

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session steady to firmer, feeding off the overnight theme, with traders squaring some positions ahead of the weekend.

 

CBOT soybean futures are called flat to 2 cents higher.

 

In overnight electronic trading, March soybeans finished 2 cents higher at US$9.72 1/2. March soymeal was US$0.70 lower at US$308.00 per short tonne, while March soyoil ended 8 points lower at 32.29 cents per pound.

 

A quiet news front and the lack of changes in weather outlooks for Argentina have traders looking for direction with a light technical bounce off the lower end of the recent trading range providing some support, analysts said.

 

A chance for more frequent scattered showers in Argentine next week are expected to keep a lid on advances, but support from outside markets should provide some strength in early action, analysts added.

 

Nevertheless, traders expect choppy activity to surface once again as traders take a cautious approach awaiting the latest weather forecast updates ahead of the weekend, a CBOT floor analyst added.

 

End of the week and month positioning is expected impact prices as well.

 

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 Thursday's high of US$9.84 3/4 and then at US$9.94. First support is seen at Thursday's low of US$9.65 1/4 and then at US$9.57 3/4.

 

The DTN Meteorlogix forecast said the next chance for some significant shower and thunderstorm activity in Argentina appears to be Monday and Tuesday of next week. Rainfall this week in some major corn and soybean areas along with cooler temperatures has eased crop stress.

 

However, there remains uncertainty as it regards the weather patterns during the critical soybean pod filling month of February with the models giving mixed signals, Meteorlogix said.

 

Meanwhile, Argentina's corn and soybean crops received a slight reprieve from the worst drought in 50 years that could trim expected losses in soy production, industry members said Thursday. Fields in the central farming provinces of Buenos Aires, Cordoba, Entre Rios and Santa Fe received up to 30 to 40 millimeters of precipitation Tuesday and Wednesday, up from average rainfall of 10 millimeters that fell in erratic and scattered showers in recent months.

 

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 higher Friday for the first time this week as participants rushed to square off positions ahead of a long weekend amid a stronger showing for soyoil and crude oil futures, trade participants said. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR34, or 1.9%, higher at MYR1,779 a metric tonne.