May 2, 2008

 

CBOT Soy Outlook on Friday: Down 2-4 cents; strong dollar, weather bearish

 

 

Soybean futures on the Chicago Board of Trade are called to open the session in weak fashion Friday, following a weaker tone in overnight trading and the key "outside market," the U.S. dollar, that is in a bearish posture for the grains and soy complex futures. The U.S. dollar is solidly stronger again Friday, following a U.S. jobs report that was deemed friendly for the greenback.

 

Soybeans are called to open 2 to 4 cents lower, with soybean meal called US$1.00 to US$3.00 lower and soybean oil steady.

 

In overnight electronic trading, July soybeans finished down 2 cents at US$12.69. July soybean meal was down US$1.50 at US$328.00 and July soybean oil futures were up 15 points at 56.50 cents.

 

"Today's trade basically comes down to three factors: the Argentine situation, the U.S. dollar and weather," said Pro Farmer senior market analyst Brian Grete.

 

"Farmer protests are likely to resume in Argentina, although not via roadblocks as before. Reports out of the country indicate farmers are likely to take a less aggressive approach, at least for now," said Grete.

 

News reports overnight said Argentine farmer protests will partially restart Saturday, although no blocking of roads is anticipated. Most of the farmer efforts are expected to be picketing along highways. Talks between the Argentine government and farmer groups are scheduled to resume next Tuesday.

 

"As for weather, another round of rains is moving through the Corn Belt, which will further slow corn planting. It's looking more likely that some acres will get shifted to soybeans as next week's forecast suggests more rains, again," said Grete.

 

Weather in the U.S. Corn Belt continues to be an underlying bearish fundamental for soybeans. Recent wet weather and more rain in the forecast for the heart of the Corn Belt have seriously delayed the start of corn planting over much of the region. That has led to ideas of farmers switching intended corn acres to soybeans, due to the damp soils at present in the Corn Belt.

 

Overnight report said Egypt bought 25,000 metric tonnes of soyoil. No origin was given on the purchase.

 

Technically, for July soybeans the next downside price objective for the bears is pushing and closing prices below solid technical support at Thursday's low of US$12.44. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at Thursday's high of US$13.00 a bushel. First resistance for July soybeans is seen at US$13.00 and then at US$13.07. First support is seen at 12.50 and then at US$12.44.