April 13, 2007

 

CBOT Soy Outlook on Friday: Down 1-2 cents; following e-CBOT, technical weakness

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session lower, taking its cue from overnight trade, with technical pressure promoting a defensive tone.

 

In e-CBOT trade, May was 1 1/4-cent lower at US$7.37, July was 2 1/2 cents lower at US$7.54, and November soybeans were 2 1/4 cents lower at US$7.82 1/4.

 

CBOT soybean futures are called to start the session 1 to 2 cents per bushel lower.

 

Technical weakness is seen keeping pressure on prices, with large domestic and global supplies and improved planting outlooks applying underlying pressure to the market, analysts said.

 

Meanwhile, the uncertainty of extended weather outlooks and planting progress is seen limiting movement in either direction, with corn/soybean spreading remaining a feature as traders eye private weather forecasts for clues to potential price direction, analysts added.

 

A technical analyst said a weekly low close in July soybean futures on Friday would inflict significant near-term chart damage. Soybean bulls would regain technical momentum by producing a close above solid chart resistance at this week's high of US$7.86. The next downside price objective is closing prices below solid support at Thursday's low of US$7.49.

 

First resistance for July soybeans is seen at Thursday's high of 7.62 and then at US$7.67. First support is seen at Thursday's low of US$7.49 and then at US$7.45.

 

The DTN Meteorlogix Weather Service forecast said snow and rain in the western Midwest will be mainly confined to Missouri on Friday through early Saturday. Precipitation should be light to moderate in northern Missouri, moderate to heavy in the south. Mainly dry conditions are on tap for Saturday and Sunday. Temperatures will average below or much below normal Friday and Saturday, and near to below normal Sunday.

 

In the eastern Midwest, mainly dry conditions are seen for Friday, with a chance for rain south and far north Friday night and Saturday. Dry conditions are expected Sunday. Rainfall of 0.50-1.50 inches should occur mainly south of a line extending from St. Louis to Daytonne. Rainfall and some mixed precipitation is possible through central Illinois and central Indiana but this should be light. Temperatures will average below or much below normal.

 

The Meteorlogix 6-10-day outlook for the Midwest calls for temperatures to average near to below normal, with precipitation near to above normal west, and near to below normal east.

 

Meanwhile, cash soybean prices in China's major producing regions were largely stable in the week ended Friday, but soyoil prices were higher during the same period on rising palm oil prices and import prices.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Friday, tracking Thursday's CBOT losses. The benchmark September 2007 contract settled RMB43 lower at RMB3,134 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives finished sharply higher Friday, boosted by a bullish fundamental outlook and an afternoon buying rush as many market players realized they'd been caught short. The benchmark June contract finished at MYR2,219 a metric tonne, up MYR44 and well above key psychological resistance at MYR2,200/tonne.