March 26, 2010

 

CBOT Soy Outlook on Friday: Up 3-5 cents; rebound aided by weaker dollar

 

 

Chicago Board of Trade soybean futures are expected to open higher Friday in a bounce aided by short-covering and a weaker dollar, analysts said.

 

Soybeans are called 3 to 5 cents higher. In overnight trade, May soybeans were up 5 1/2 cents to US$9.48 per bushel and July soybeans were up 5 1/4 cents to US$9.55 3/4.

 

May soymeal was up US$2.10 to US$268.0 per short tonne and May soyoil was up 30 points to 39.00 cents per pound.

 

After dropping more than 15 cents on Thursday, the market is poised to rebound as a weaker dollar sets a supportive tone. Traders are positioning themselves ahead of Wednesday's planting intentions report from the U.S. Department of Agriculture, and expectations for the report have varied widely.

 

"People are starting to second-guess themselves," said Jerry Gidel, analyst with North America Risk Management Services. "There are all sorts of rumors floating about."

 

The uncertainty could keep prices from moving too far in either direction ahead of the report. Gidel said Friday's trade could bring "a little corrective scenario for an ugly week."

 

Large South American supplies are hanging over the market, although Doane Advisory Services said that forecasts calling for some rain in Brazil could slow the harvest, which would give the market some short-term support.

 

Bears regained the near-term technical advantage Thursday, a technical analyst said.

 

The next downside price objective for the bears is pushing and closing prices below solid technical support at the March low of US$9.21 3/4, the technical analyst said. The next upside technical objective for the bulls is pushing and closing May prices above solid technical resistance at this week's high of US$9.76 1/2.

 

First resistance for May soybeans is seen at US$9.50 and then at US$9.60. First support is seen at US$9.41 and then at US$9.35.

 

In international markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Friday, along with a fall on the Chicago Board of Trade overnight amid expectations of higher planting area in the U.S.

 

The benchmark September 2010 soybean contract settled down RMB20, or 0.5%, at RMB3,845 a metric tonne.

 

Soybean prices in major producing areas in China fell in the week to Friday as traders cut prices to compete with cheaper imports.

 

Trade was very light with farmers reluctant to sell their crop at low prices.

 

Also, crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, breaching a key support level as participants squared off positions ahead of the weekend, said traders.

 

The benchmark June contract on the Bursa Malaysia Derivatives exchange ended MYR41 lower at the intraday low of MYR2,534 a metric tonne, after trading in a range of MYR2,534-MYR2,565.