April 18, 2008

 

CBOT Soy Outlook on Friday: Slighly mixed; consolidates, outside influences

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day with a slightly mixed undertone, as the market remains in a consolidation mode, with weakness in outside market lending pressure to prices.

 

CBOT soybean futures are called to start the session slightly mixed.

 

In overnight electronic trading, July soybeans were 3/4 cents higher at US$13.67 1/4, November soybeans were 3/4 cents higher at US$12.79. July soyoil was 6 points lower at 61.52 cents per pound and July soymeal was US$1.20 lower US$348.80 per short tonne.

 

A quiet news front is keeping the market in a sideways trend, with a weaker tone in outside markets applying pressure and solid underlying demand remaining a supportive feature, said Jason Roose, analyst with U.S. Commodities in West Des Moines, Iowa.

 

The market has built in a lot of premium over the past week, and overbought conditions is expected to generate profit taking pressure in unison with the broad based declines across the commodity sector overnight, Roose added.

 

Meanwhile, weather forecasts calling for less rain than was previously forecast for the Midwest may allow producers to begin corn plantings, and that is raising supportive thoughts that soybeans may not garner additional swing acres, analysts said.

 

Otherwise, traders anticipate technical factors will remain featured, as the market continues its consolidative theme until the uncertainties of acreage, weather and demand are cleared up, analysts added.

 

A technical analyst said market bulls still have the near-term technical advantage. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at this week's high of US$14.15 a bushel. The next downside price objective for the bears is pushing prices below solid technical support at US$13.38 3/4, which would fill on the downside an upside price gap on the daily bar chart.

 

First resistance for July soybeans is seen at Thursday's high of US$13.81 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.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended 2.2% lower Friday on the prospects of likely higher output in 2008, profit-taking and strengthening of the ringgit against the U.S. dollar, said trade participants. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR79 lower at MYR3,553 a metric tonne, close to the intraday low of MYR3,552/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled up Friday on Thursday's gains in CBOT soybeans. Analysts said consolidation is likely to continue for a while. The benchmark January 2009 soybean contract settled RMB40 higher at RMB4,209 a metric tonne, after trading between RMB4,159/tonne and RMB4,239/tonne.

 

Cash soybean prices in China's major producing regions gained in the week ended Friday, as higher prices of CBOT soybean futures prompted buying by crushers amid low inventories.

 

Chinese importers booked 17-19 cargoes of soybeans mostly from the U.S. and Argentina this week, according to data from Shanghai JCI Friday. The surge in soybean cargoes booked this week was mainly due to purchases by state reserve companies, which have low levels of stocks and have increased their purchase volume amid current volatile soybean prices on CBOT, an analyst said.