March 5, 2009

Chicago Board of Trade soybean futures are expected to start Thursday's day session on the downside, as profit-taking, negative outside influences and weak export sales are seen adding pressure.

 

CBOT soybean futures are called 5 cents to 7 cents lower.

 

In overnight electronic trading, March soybeans finished 7 1/2 cents lower at US$8.68, and May soybeans were down 7 cents at US$8.61 1/2. May soymeal was US$2 lower at US$265.30 per short tonne, while May soyoil dropped 21 points to 30.78 cents per pound.

 

"Soybeans should see profit taking on the open this morning, with erratic trade continuing," said Bryce Knorr, Farm Futures senior editor, in his daily market commentary.

 

Soybean export sales totaled 155,800 metric tonnes for the week ending Feb. 26, according to figures released Thursday by the U.S. Department of Agriculture.

 

Analysts polled by Dow Jones Newswires predicted export sales to range from 300,000 tonnes to 600,000 tonnes.

 

Soymeal export sales of 117,100 also disappointed analysts. The forecast range was 300,000-600,000.

 

Soyoil export sales of 13,600 tonnes beat expectations ranging from 5,000-10,000.

 

Looking at technical charts, 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 is pushing and closing prices below solid technical support at the contract low of US$7.86 1/2 a bushel.

 

First resistance for May soybeans is seen at this Wednesday's high of US$8.78 3/4 and then at US$8.91. First support is seen at US$8.60 and then at US$8.50.

 

March soyoil deliveries totaled 2,272 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was March 4.

 

No March soymeal deliveries occurred.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday despite a brief disappointment in the market over the absence of additional stimulus measures expected from the National People's Congress.

 

The benchmark September 2009 soybean contract gained 0.9% to settle at RMB3,443 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday in volatile trade as participants weighed soyoil weakness against expected bullish price forecasts that may be released at a vegetable oils conference next week, trade participants said.

 

The benchmark May contract on the Bursa Malaysia Derivatives ended MYR4 higher at MYR1,906 a metric tonne in volatile trade that saw prices swinging between positive and negative territory.

 

In other global trading news, Brazil's estimated soybean production for 2008-09 is lowered to 57 million tonnes, and exports and crush forecasts are lowered to 24 million and 32.2 million tonnes, respectively, according to a U.S. Department of Agriculture attache report posted Wednesday on the Foreign Agricultural Services Web site.

 

The harvest began in January and is now 13% advanced.

 

Last year's steep increase in the price of inputs, and resultant tight credit, was particularly problematic for Mato Grosso, where transportation costs significantly increase the costs and decrease the price paid to the farmer.

 

The USDA also said Peruvian soybean meal imports are forecast at 750,000 metric tonnes in CY 2009, up 20,000 tonnes from last year, driven by demand for poultry feed.