March 27, 2009
CBOT Soy Outlook on Friday: Seen lower on outside markets, fresh news void
A market void of fresh supportive news coupled with lower outside market influences have Chicago Board of Trade soybeans poised for a lower start to Friday's day session.
CBOT soybean futures are called 4 cents to 6 cents lower.
In overnight electronic trading, May soybeans were 8 cents lower at US$9.36. May soymeal was US$2.90 lower at US$287.90 per short tonne, while May soyoil ended 28 points lower at 33.32 cents per pound.
The combination weakness in stock indexes, crude oil, and metals coupled with a firmer U.S. dollar index is supplying outside pressure to keep buyers on the defensive, a CBOT floor analyst said.
Fears of economic troubles have commodities eyeing financial markets for direction in the absence of fresh news.
Talk of China looking to release soybean reserves into their domestic markets and fears of a bearish planting estimate from U.S. Department of Agriculture Tuesday, are supplying fundamental pressure to aid the defensive tone, analysts said.
However, the uncertainty of Argentina's farmers strike and its potential to shift demand to U.S. shores the longer it carries on is an underlying bullish feature, expected to limit downside moves, a cash connected CBOT broker said.
Argentina is the world's third largest producer of soybeans and the global leader in soyoil and soymeal exports.
Cautious activity is expected to extend through the session, as traders avoid taking on added risk heading into the weekend.
A market technician said the next upside price objective for May soybeans is to push and close prices back above solid technical resistance at this week's high of US$9.81 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.20 a bushel.
First resistance for May soybeans is seen at Thursday's high of US$9.62 and then at US$9.71. First support is seen at Thursday's low of US$9.41 1/4 and then at US$9.28.
Soy product futures are seen lower, in step with overnight action.
The DTN Meteorlogix weather forecast said there continues to be an active weather pattern in the U.S., as storms form over the western U.S. before moving into the Midwest region during the next 10 days. This means spring field work delays can be expected, Meteorlogix said.
In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled marginally lower Friday, amid broad weakness in domestic commodities markets. Cash soybean prices in China's major producing areas were slightly weaker in the week ended Friday, as most processing plants suspended production due to low profit margins.
Crude palm oil futures on Malaysia's derivatives exchange declined Friday on pressure from lower soyoil and crude oil futures during Asian trading hours.
