February 13, 2009

Chicago Board of Trade soybean futures are expected to start Friday's day session with a lower bias, influenced by improved rain potential for South American crops.

 

CBOT soybean futures are called 2 cents to 4 cents lower.

 

In overnight electronic trading, March soybeans finished 1 1/2 cents lower at US$9.67. March soymeal was US$1.10 lower at US$303.60 per short tonne, while March soyoil ended 1 point lower at 32.82 cents a pound.

 

Private weather forecasters have added rain into their outlooks for Argentina early next week, and that should apply some initial price pressure, said Vic Lespinasse, analyst with GrainAnalyst.com.

 

Mixed signals from outside markets will keep attention on weather, but cautious activity is expected, heading into an extended holiday weekend, Lespinasse added. CBOT markets will be closed Monday in observance of Presidents Day. The markets will reopen with Monday evening's overnight session.

 

Traders anticipate another session with participants keeping an eye on midday weather updates and outside markets for guidance, particularly with some market players a little apprehensive in an uncertain economic climate.

 

Recently, crude oil futures were posting modest gains, the U.S. dollar index was lower and equities were pointing to a steady opening.

 

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$10.19 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$9.34 1/2 a bushel.

 

First resistance for March soybeans is seen at Thursday's high of US$9.85 1/4 and then at US$9.96. First support is seen at Thursday's low of US$9.67 1/2 and then at US$9.50.

 

DTN Meteorlogix weather added a new rain chance to Argentina's outlook for this coming Monday, as compared to Thursday's forecast. Temperatures are seen cooling off somewhat early next week. This pattern continues to feature more rain than expected, especially as it concerns the Cordoba, Sante Fe and Entre Rios regions, Meteorlogix said. These areas can expect an improved outlook for soybeans from earlier estimates. La Pampa and especially western Buenos Aires continue to suffer from lingering drought, Meteorlogix added.

 

In other news, Argentine farmers Thursday postponed plans to go on strike, calling instead for talks with President Cristina Fernandez to find solutions for a sector reeling from the worst drought in decades.

 

In overseas markets, China's soybean futures trading on the Dalian Commodity Exchange settled slightly up Friday, but trading was very light as participants remained cautious, doubtful over market direction. The benchmark September 2009 soybean contract settled RMB9 per metric tonne higher at RMB3,555 a tonne, up 0.3%.

 

Cash soybean prices in China's major producing areas were higher in the week ended Friday, supported by government purchases.

 

Meanwhile, China's soybean imports in the next two months will remain high as traders contract bigger volumes in an attempt to preempt a likely surge in prices caused by the drought in key producing regions in South America and China, according to the National Grain and Oils Information Center.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher on the possible strike in Argentina by soybean farmers that may prompt buyers to switch to palm oil from soyoil, trade participants said Friday. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR67 higher at MYR1,995 a metric tonne.