March 12, 2009

Chicago Board of Trade soybean futures are expected to start Thursday's day session higher, following the overnight theme amid friendly outside market influences and supportive weekly export sales.

 

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

 

In overnight electronic trading, March soybeans finished 4 cents higher at US$8.79, and May soybeans were 3 cents higher at US$8.65. May soymeal was US$0.60 higher at US$270.10 per short tonne, while May soyoil ended 9 points higher at 30.00 cents per pound.

 

Prices are poised to edge higher in early trade, garnering strength from outside markets, with higher-than-expected weekly export sales providing a fundamental boost, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

In early market action, stock indexes are posting modest gains, the U.S. dollar is weaker and crude oil futures are sustaining price strength.

 

Lingering support from tight old crop inventories remains an underlying feature, but with economic worries and outlooks for a jump in 2009 U.S. soy acres, upside potential may be limited, analyst added.

 

Otherwise, a quiet news front will continue to promote cautious activity, with traders eyeing outside financial markets for direction, Lespinasse said.

 

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 last week's low of US$8.38 1/4 a bushel.

 

First resistance for May soybeans is seen at US$8.70 and then at US$8.80. First support is seen at Wednesday's low of US$8.56 1/2 and then at US$8.50.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 838,000 metric tonnes for the week ended March 5. Sales for 2008-09 were a net 837,000 metric tonnes. Analysts had forecast sales between 200,000 and 500,000 metric tonnes. The primary buyer was China with 406,900 metric tonnes.

 

Soymeal sales were a net 147,400 tonnes. Trade estimates ranged from 75,000 to 125,000 tonnes. Soyoil commitments were 24,800 metric tonnes. Analysts had forecast sales between 5,000 and 10,000 tonnes.

 

March soybean deliveries totaled 40 lots. A customer account at Astro Division of UBS issued all 40 lots, while the house account at Tenco was the primary stopper of 25 lots. The last trade date assigned was February 24.

 

March soyoil deliveries totaled 1,269 lots. Customer accounts at Man Professional Clearing issued 809 lots and stopped 525 lots. The last trade date assigned was March 11.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, supported by favorable U.S. Department of Agriculture report Wednesday. The benchmark September 2009 soybean contract settled RMB15 a metric tonne, or 0.4%, higher at RMB3,445/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange fell Thursday on bearish forecasts presented at a palm oil conference in Kuala Lumpur, said trade participants. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR60 lower at MYR1,920 a metric tonne.