March 28, 2008

 

CBOT Soy Outlook on Friday: Down 15-20 cents; pre-report position, outside markets

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session on the defensive, pressured by pre-crop report position evening and bearish outside market influences.

 

CBOT soybean futures are called to start the session 15 to 20 cents lower.

 

In overnight electronic trading, May soybeans were 20 cents lower at US$13.07 1/4, July soybeans were 21 1/2 cents lower at US$13.21. May soyoil was 75 points lower at 56.73 cents per pound and May soymeal was US$4.80 lower at US$344.00 per short tonne.

 

The combination of position evening heading into the weekend ahead of Monday's key planting and stocks reports as well as month-ending book squaring is expected to apply pressure to futures, with many participants heading to the sidelines, analysts said.

 

"Heading into a major report even is always the second-best seat in the house, and with the volatility in the market this year, limiting risk exposure is essential," a CBOT floor analyst said.

 

Meanwhile, a firmer U.S. dollar early Friday coupled with weakness in crude oil and metal futures is setting the stage for speculative selling as well, he added.

 

A quiet news front will keep attention on Monday's crop reports, with the unsettled Argentina farmers' strike expected to remain an underlying theme in the marketplace, traders said.

 

The U.S. Department of Agriculture is scheduled to release its 2008 U.S. prospective planting and quarterly grain stocks report Monday at 8:30 a.m. EDT.

 

A Dow Jones Newswires survey of 22 analysts saw a range of forecasts between 70.0 million and 74.2 million acres, putting the average at 71.5 million. These are all up from the 2007 soybean seedings of 63.6 million acres.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at this week's high of US$13.72 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$13.22, which would fill on the downside an upside price gap on the daily bar chart.

 

First resistance for July soybeans is seen at US$13.50 and then at Thursday's high of US$13.66. First support is seen at Thursday's low of US$13.39 1/2 and then at US$13.30.

 

The U.S. Census Bureau downwardly revised its February soyoil stocks data Friday, pegging stocks at 3.101 billion pounds. This is up from the 2.681 billion estimate reported Thursday. The January 2008 stocks figure was upwardly revised as well to 3.234 billion pounds, up from 3.061 billion reported Thursday.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended 2.47% lower amid sluggish trade Friday as investors liquidated positions in the run-up to the weekend after a hike in margin rates in the week, trade participants said. The benchmark June contract on the Bursa Malaysia Derivatives ended MYR90 lower at MYR3,550/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Friday on sluggish demand for cash soybeans. The benchmark January 2009 soybean contract settled down 1.6% or RMB70 at RMB4,179 a metric tonne after trading between RMB4,110 and RMB4,245/tonne.

 

Cash soybean prices in China's major producing regions were lower in the week to Friday on falling demand, with traders staying on the sidelines after the recent tumble in prices.

 

China has detected the bean pod mottle virus in a shipment of soybeans from the U.S., according to a local media report. It was detected by the Lianyungang Entry-Exit Inspection And Quarantine Bureau in Jiangsu province, according to an article published Friday on the Dalian Commodity Exchange's Web site, citing the Xinhua Daily newspaper.