April 20, 2007

 

CBOT Soy Outlook on Friday: Flat-down 1 cent, following overnight theme

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session steady to easier, taking their cue form overnight trade amid the absence of fresh fundamental news, analysts said.

 

In e-CBOT trade, May was 3/4 cent lower at US$7.17 1/2, July was 1 cent lower at US$7.34, and November soybeans were 1 cent lower at US$7.61.

 

CBOT soybean futures are called to start the session flat to 1 cent per bushel lower.

 

The market has nothing new to digest, but with better planting opportunities for corn plantings in the Midwest, futures may find underlying support to stabilize recent declines, analysts said.

 

Bearish technical momentum and abundant nearby and world supplies remain a hindrance to old-crop price strength, but end-of-the-week position squaring and spillover support from wheat may provide a boost to underpin futures, traders added.

 

A technical analyst said serious near-term chart damage has been inflicted in soybeans recently. A seven-week-old downtrend line is in place on the daily bar chart. But his bias is that there is not much left on the downside, as the market is now short-term oversold, technically, and there is some strong underlying technical support just beneath the market. Soybeans would regain some upside technical momentum by producing a close above solid chart resistance at US$7.56 basis the July contract. The next downside price objective is closing prices below solid support at US$7.22.

 

First resistance for July soybeans is seen at Thursday's high of US$7.41 and then at 7.50. First support is seen at Thursday's low of US$7.34 and then at this week's low of US$7.29.

 

The DTN Meteorlogix Weather Service forecast said soil temperatures in the western Midwest will continue to turn warmer during the next seven days. Showers on tap for Sunday and again early next week may lead to field work and planting delays. In the eastern Midwest, the next significant chance for rain does not come until next Wednesday or Thursday. Conditions for field work and planting will improve until that time. The rain system next week continues to look moderate to heavy, especially over southern and eastern Illinois, Indiana and Ohio. This could lead to planting delays, Meteorlogix reports.

 

In overseas markets, cash soybean prices in China's major producing regions were lower in the week ended Friday, pressured from additional expected supplies, traders said.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, following Thursday's CBOT gains. The benchmark September 2007 contract settled RMB7 higher at RMB3,067 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Friday as the market succumbed to profit-taking amid slightly disappointing export numbers. The benchmark July CPO contract ended at MYR2,182 a metric tonne, down MYR48 from Thursday after moving between MYR2,173 and MYR2,241/tonne.