February 26, 2009

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session with modest declines, following the overnight theme amid the absence of fresh supportive news.

 

CBOT soybean futures are called 3 cents to 5 cents lower.

 

In overnight electronic trading, March soybeans finished 6 cents lower at US$8.72, and May soybeans were 6 cents lower at US$8.74. May soymeal was US$0.20 lower at US$267.20 per short tonne, while May soyoil ended 59 points lower at 31.61 cents per pound.

 

A lack of bullish news in the market, with lower-than-expected weekly export sales, a slow crush pace and expectations of a jump in 2009 soy acres at the expense of corn have the market poised for a lower start, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

Stabilized crop conditions in South America are helping create a directionless theme, with the uncertain economic outlook keeping some traders on the sidelines, analysts said.

 

A choppy tone is expected, with traders also eyeing the adjustment underway in the meal/oil spread relationship. On Wednesday, May oil share jumped to 37.58%, up from Tuesday's close of 35.9%.

 

Otherwise, trade positioning ahead of Friday's first notice day for March futures will keep participants eyeing movements in nearby spreads.

 

Looking at technical charts, a bearish symmetrical triangle pattern or a bear flag pattern has formed on the daily bar chart, a technical analyst said.

 

The next upside price objective for May soybeans is to push and close prices back above psychological resistance at US$9.00 a bushel. The next downside price objective for is pushing and closing prices below solid technical support at last week's low of US$8.54 1/4 a bushel.

 

The DTN Meteorlogix weather forecast said drier, hotter weather continues through the daytime hours of Sunday in Argentina. There is a chance for showers or rain Sunday night through early Tuesday. In Brazil, a turn towards drier and hotter weather in the northern growing areas will favor the early harvest of crops. A trend toward more rain in Rio Grande do Sul will favor pod filling soybeans in that location, Meteorlogix said.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 347,700 metric tonnes for the week ended Feb. 19. Sales for 2008-09 were a net 339,400 metric tonnes that were partially offset by cancellations of 144,500 tonnes for unknown destinations. Analysts had forecast sales between 350,000 and 1,000,000 metric tonnes. The primary buyer was China with 339,100 metric tonnes.

 

Soymeal sales were a net 145,600 tonnes. Trade estimates ranged from 75,000 to 175,000 tonnes. Soyoil commitments were 8,500 metric tonnes. Analysts had forecast sales between 10,000 and 20,000 tonnes.

 

U.S. soybean crushings totaled 145.2 million bushels in January, according to data released by the U.S. Census Bureau Thursday. On average, analysts anticipated a 145.6-million-bushel crush, according to a Dow Jones Newswires survey. Crushings were up from 141.3 million bushels a month earlier and 160.5 million bushels a year earlier. Soymeal stocks for January totaled 447,220 short tonnes, compared to the average estimate of 379,475. Soyoil stocks totaled 2.929 billion pounds. Analysts, on average, expected 2.869 billion pounds.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, tracking CBOT declines Wednesday. The benchmark September 2009 soybean contract settled RMB36 a metric tonne lower at RMB3,472/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange traded lower Thursday as weak soybean oil futures weighed on palm oil prices, said trade participants. The benchmark May contract on the Bursa Malaysia Derivatives ended down MYR4 at MYR1,890 a metric tonne.