May 14, 2009

 

CBOT Soy Outlook on Thursday: Seen lower on outside market weakness

 

 

Chicago Board of Trade soybean futures are seen starting Thursday's day session lower, following the overnight theme as global economic worries generate broad based market weakness.

 

CBOT soybean futures are seen opening 5 cents to 7 cents lower, with soy product futures down in unison with overnight price weakness.

 

A modest technical correction is anticipated after Wednesday's run to 7-month highs, with weakness in macro markets and a lack of fresh old crop export news attracting some profit taking a CBOT floor analyst said.

 

Weather forecast pointing to better planting opportunities in the Midwest next week is seen lending some pressure as well.

 

However, traders anticipate the declines will be limited amid the market's tight supply outlooks, shrinking South American crop estimates and the willingness of buyers to step in on price breaks in the midst of a bullish uptrend, analysts added.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at US$11.50 a bushel. The next downside price objective is pushing and closing prices below solid support at US$10.50 a bushel.

 

Overnight weakness in world vegoil markets, lower crude oil prices and a higher than expected April stocks figure in National Oilseed Processors crush report is expected to pressure soyoil is early action.

 

Thursday is the last trading day for May futures, with the contracts expiring at 1:00 p.m. EDT.

 

DTN Meteorlogix Weather said Thursday's long range outlook for U.S. Midwest is more favorable for plantings as it features drier weather and possibly developing warmer conditions. However, the Midwest turns colder during the short range forecast before the warmer weather develops.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 754,900 metric tonnes for the week ended May 7. Sales for 2008-09 were a net 401,900 metric tonnes. Analysts had forecast sales between 350,000 and 800,000 million metric tonnes.

 

Soymeal sales were a net 338,800 tonnes. Trade estimates ranged from 100,000 to 300,000 tonnes. Soyoil commitments were 20,200 metric tonnes. Analysts had forecast sales between 10,000 and 25,000 tonnes.

 

USDA on Thursday also announced private export sales of 120,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

National Oilseed Processors Association says 134.1 million bushels of soybeans were crushed in April, down from 137.3 million in March, just above the average analyst estimate of 133.8 million. The range of pre-report estimates was 129.85 million to 139 million. Soyoil stocks were pegged at 2.710 billion pounds, up from 2.593 billion in March, and above the average analyst estimate of 2.548 billion. The range of estimates was 2.492 billion pounds to 2.620 billion pounds.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, in tandem with other domestic markets. Crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday on profit-taking prompted by concerns the commodity's recent rally may have priced it out of buyers' reach, said trade participants.