April 11, 2008

 

CBOT Soy Outlook on Friday: Seen mixed; consolidating ahead of weekend

 

 

Chicago Board of Trade soybean futures are seen starting Friday's session mixed, taking on more of a consolidative theme heading into the weekend.

 

CBOT soybean futures are called to start the session mixed, with old crop futures down 1 to 2 cents and new crop contracts 1 to 2 cents higher.

 

In overnight electronic trading, May soybeans were 2 1/2 cents lower at US$13.53 1/2, July soybeans were 3 3/4 cents lower at US$13.69. May soyoil was 10 points lower at 60.07 cents per pound and May soymeal was US$1.70 lower US$350.50 per short tonne.

 

The market is poised for a mixed start, with old crop futures pressured by pre-weekend position evening after sharp gains Thursday, and lingering uncertainty surrounding the potential for a resumption of a farmers strike in Argentina, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The uncertainty of the strike and its impact on U.S. export demand is keeping the market handcuffed, but new crop futures are underpinned by weather, as the market watches to see if corn plantings can pick up and take some acres from soybeans, Roose added.

 

Meanwhile, a lack of any other fresh news, with outside inflationary markets quiet, is expected to keep attention on technical factors, particularly after nearby futures satisfied short term upside technical objectives Thursday, a CBOT floor broker said.

 

Nevertheless, solid underlying demand remains a supportive feature to limit any downside potential, he added.

 

A technical analyst said a five-week-old downtrend on the daily bar chart was negated Thursday, and prices also pushed above a key Fibonacci resistance level. The next upside price objective for July soybeans is to push and close prices above psychological resistance at US$14.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$13.38 3/4, which would fill on the downside Thursday's upside price gap.

 

First resistance for July soybeans is seen at Thursday's high of US$13.96 1/2 and then at US$14.00. First support is seen at US$13.50 and then at Thursday's low of US$13.43.

 

The U.S. Department of Agriculture announced Friday private exporters reported the sale of 240,000 metric tonnes of soybeans for delivery to China in the 2007-08 marketing year.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended little changed in choppy trade Friday, swinging both ways amid strong fundamentals and pre-weekend profit taking, said trade participants. The benchmark June contract on the Bursa Malaysia Derivatives ended MYR1 lower at MYR3,454 a metric tonne, off the intraday high of MYR3,500/tonne.

 

China's soybean futures traded on the Dalian Commodity Exchange settled lower Friday amid expectations of supply pressure. The benchmark January 2009 soybean contract settled RMB35, or 0.86%, lower at RMB4,012 a metric tonne.

 

Soybean prices in China's major producing regions were higher in the week to Friday as farmers were reluctant to sell due to having little stock on hand.

 

In other news, Chinese importers booked 9-11 soybean cargoes from South America this week, according to data from Shanghai JCI Friday. The cargoes are to be delivered in May and June, said an analyst at the grain consultancy. Last week, China booked 5-7 soybean cargoes, mostly from the U.S. due to a farmers' strike in Argentina.

 

China imported 2.32 million metric tonnes of soybeans in March, up 9.9% from a year earlier, according to preliminary data issued by the General Administration of Customs Friday. The country imported 7.78 million tonnes of soybeans in the first quarter, up 36% from 5.72 million a year ago, it said.