April 8, 2009

 

CBOT Soy Outlook on Wednesday: Mixed; overnight theme, pre-report positioning

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session mixed, following the overnight theme with the trade evening positions ahead of Thursday's supply and demand report.

 

CBOT May soybean futures ended the overnight session 2 1/2 cents higher at US$9.92 while November soybeans were 1/4 cent lower at US$9.08 1/4. May soymeal was US$1.30 higher at US$307.50 per short tonne, and May soyoil was 14 points lower at 34.70 cents per pound.

Tight old crop supplies and strong export demand remain underpinning features for nearby old crop contracts, while deferred new crop futures garner pressure from prospects for increased 2009 acreage.

 

A quiet news front is expected to promote pre-supply and demand report positioning, with mixed signals from outside markets not providing directives, a CBOT floor analyst said.

 

Stock index futures are higher, the U.S. dollar index is firmer and crude oil futures are on the defensive in early market action.

 

Meanwhile, lingering weather issues that may promote delays to the Midwest planting season are raising prospects for additional U.S. 2009 soybean acres. This is expected to weigh on back months and potentially widen the differential in the July/November bull spread.

 

A technical analyst said prices are in a five-week-old uptrend on the daily bar chart. The next upside price objective for May soybeans is to push and close prices above solid technical resistance at the January high of US$10.24 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.40 a bushel.

 

The DTN Meteorlogix weather forecast said wet conditions and cold temperatures will likely keep field work slow in the U.S. Midwest during the next week to 10 days.

 

Soymeal futures are seen higher and soyoil lower, in tune with the overnight theme.

 

U.S. Department of Agriculture is scheduled to release its April supply and demand revisions at 8:30 a.m. EDT Thursday.

 

The average of 14 analysts estimates from a Dow Jones Newswires survey projects 2008-09 U.S. soybean ending stocks at 169 million bushels. The averages ranged from 101 million to 185 million bushels. In March, the USDA projected the 2008-09 carryout at 185 million bushels.

 

In demand news, USDA on Wednesday announced private export sales of 110,000 metric tonnes of soybeans for delivery to China in the 2008-09 marketing year.

 

Taiwan Sugar Corp. bought 23,000 metric tonnes of corn from the U.S., and 12,000 tonnes of soybeans from trading house Agrex in a tender concluded late Tuesday, a Taipei trader said Wednesday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, with government purchases drawing to a close.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Wednesday on long liquidation in range bound trade amid a lack of fresh leads apart from weaker soyoil and crude oil, said trade participants.