March 19, 2010

 

CBOT Soy Outlook on Friday: Mixed; tightening supplies support old crop

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's day session mixed, with old crop futures supported by tightening supplies while new crop contracts drift lower on outlooks for higher 2010 production.

 

CBOT soybeans are seen opening mixed, with nearby futures up 1 cent and deferred months down 1 cent.

 

Overnight, CBOT May soybeans were 1 1/4 cents higher at US$9.46 1/4 a bushel.

 

The uncertainty about new crop acreage heading toward the March 31 planting intentions report will support nearby contracts, but weakness from outside markets and an advancing South American harvest should cap upside potential.

 

Underlying technical buying following Thursday's settlement above key moving averages basis May futures will attract buying to offset some of the outside market pressure, according to a market note from AgResource Company.

 

A market technician said price action on charts is signaling that sideways to higher prices are possible near-term. Closes above US$9.64 1/4 in the May contract is needed to confirm that a low has been posted, but if May futures renew last week's decline, February's low of US$9.11 is the next downside target, he adds.

 

Choppy action is anticipated, with traders watching private acreage estimates. Informa Economics is expected to release its latest planting projections near 11:30 a.m., EDT.

 

The U.S. Department of Agriculture announced private export sales Friday of 106,000 metric tonnes of soybeans for delivery to unknown destinations in the 2010-11 marketing year.

 

Meanwhile, Argentina has sold several cargoes of corn, soymeal, soybeans and soyoil this month to buyers in Southeast Asia as the country is harvesting a bumper crop and it doesn't want to be left with large stockpiles that could weigh on prices, trading executives said Friday.

 

AgResource Company, "looks for Argentina to further reduce cash basis offers as the harvest pace advances."

 

In overseas markets, soybean futures settled higher on the Dalian Commodity Exchange Friday as stronger soybean prices on CBOT bolstered sentiment. The September soybean contract settled 0.5% higher at RMB3,862 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday amid expectations of higher exports and consolidation of prices ahead of the weekend, said trade participants. The June contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR2,577 a metric tonne.