February 25, 2010

 

CBOT Soy Outlook on Thursday: Down 7-10 cents on crush, exports, outside markets

 

 

Soybean futures at Chicago Board of Trade are poised for a lower start to Thursday's day session, influenced by bearish crush and export data, and outside market indicators.

 

CBOT soybeans are seen opening 7 cents to 10 cents lower.

 

Overnight, CBOT March soybeans ended 6 1/4 cents lower at US$9.49 1/4 a bushel, and May soybeans were 6 3/4 cents lower at US$9.56 1/4.

 

Lower-than-expected January crush data and weekly export sales are providing bearish fundamental features for the market to digest.

 

"The crush and export data is seen as a sign of slowing demand for soybeans," said a CBOT floor analyst.

 

Lower South American premiums for soybeans and soymeal coupled with talk in the market of China canceling 2 to 4 cargoes of previous bought U.S. soybeans is expected to aide the defensive tone.

 

Outside macro markets are adding to the lower theme, with a firmer U.S. dollar, and lower crude oil and metal prices providing a bearish psychological influence for traders, analysts said.

 

However, despite the lower price themes, traders remain on guard for buying to emerge on any sign of exhausted selling, as end user buying has remained consistent on recent price breaks.

 

A technical analyst said first resistance for May soybeans is seen at Wednesday's high of US$9.69 1/2 and then at last week's high of US$9.75. First support is seen at Wednesday's low of US$9.52 and then at US$9.41.

 

The amount of soybeans crushed in January was in lower-than industry expectations, according to data issued by the U.S. Census Bureau. The bureau says 167.2 million bushels were crushed, compared to the average of analyst estimates of 170.2 million. Soymeal stocks jumped to 630,497 short tonnes in January from 568,815 tonnes in December. Meal stocks came in above the average analyst estimate of 521,400 tonnes. The bureau says soyoil stocks were 3.239 billion pounds, compared to the average analyst estimates of 3.123 billion.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 242,000 metric tonnes for the week ended Feb. 18, with 239,000 tonnes sold for delivery in the 2009-10 marketing year. The primary buyer was China at 177,700 metric tonnes. Analysts had forecast sales between 200,000 and 350,000 metric tonnes.

 

USDA reported 1.122 million metric tonnes were shipped in the week ended Feb. 18, unchanged from the previous week, but down 10% from the prior four-week average. The primary destination was China with 666,300 tonnes.

 

Soymeal 2009-10 sales were a net 81,900 tonnes. Trade estimates ranged from 100,000 to 175,000 tonnes. Soyoil commitments were 40,200 metric tonnes. Analysts had forecast sales between 10,000 and 20,000 tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled marginally lower Thursday, retreating from earlier gains due to weak supply-demand fundamentals. The September 2010 soybean contract settled down RMB9, or 0.2%, at RMB3,849 a metric tonne.