CBOT Soy Outlook on Friday: Seen lower; dollar strength to weigh

 

 

CBOT soybeans are seen opening Friday's day session 7 cents to 10 cents lower.

 

Overnight, CBOT March soybeans slid 9 3/4 cents to US$9.33 1/4 a bushel, and May soybeans were 9 3/4 cents lower at US$9.42 1/4.

 

The strength in U.S. dollar is weighing on prices, as news that China increased its bank reserve requirements sparked fears of a possible slowdown in the country's economic growth.

 

Crude oil and metal futures are all posting losses in early trading.

 

The absence of any fresh fundamental news is expected to keep attention on outside influences, with traders looking to even some positions ahead of the extended holiday weekend, analysts said.

 

The U.S. dollar's strength will keep a lid on upside potential, with traders gearing up for a possible slow down in market activity, with many Asian and South American participants absent next week amid the Lunar New Year and Carnival holiday celebrations next week.

 

A market technician said the next downside price objective for March soybeans is pushing and closing prices below major psychological support at last week's low of US$9.00. The next upside technical objective is pushing and closing March prices above solid technical resistance at US$9.65.

 

U.S. Department of Agriculture reported total weekly soybean export sales for delivery in the 2009-10 marketing year were a net 312,900 metric tonnes for the week ended Feb. 4. The primary buyer was China at 191,300 metric tonnes. Analysts had forecast sales between 300,000 and 600,000 metric tonnes.

 

USDA reported 1,199,000 metric tonnes were shipped in the week ended Feb. 4, down 6% from the previous week and down 18% from the prior four-week average. The primary destination was China with 647,200 metric tonnes.

 

Soymeal 2009-10 sales were a net 102,700 tonnes. Trade estimates ranged from 100,000 to 200,000 tonnes. Soyoil commitments were 44,800 metric tonnes. Analysts had forecast sales between 10,000 and 30,000 tonnes.

 

CBOT markets will be closed Monday in observance of the Presidents Day holiday.

 

In overseas markets, Dalian Commodity Exchange soybean futures settled lower Friday, with traders trying to avoid risk in the last trading session before the week-long Lunar New Year holiday. The September 2010 soybean contract settled RMB27, or 0.7%, lower at RMB3,780 a metric tonne.

 

Cash soybean prices in China's major producing areas were mostly slightly lower in the week to Friday as processors have stopped production while traders reduced bidding prices due to the coming Lunar New Year holiday.

 

Bursa Malaysia Derivatives crude palm oil futures ended unchanged Friday after a bout of late buying spurred by participants eager to square off positions ahead of a long holiday capped earlier losses, said trade participants. The April CPO contract on the Bursa Malaysia Derivatives ended unchanged at the intraday high of MYR2,580 a metric tonne

 

Rotterdam soybean prices were flat while soymeal prices were mixed. European vegoil prices were mixed.