CBOT Soy Outlook on Thursday: Down 2 - 4 cents, following overnight theme

Chicago Board of Trade soybean futures are expected to start Thursday's day session modestly lower, following the overnight theme in the absence of fresh market moving news.

 

CBOT soybean futures are seen opening 2 cents to 4 cents lower, with soy product futures following overnight price action.

 

Selling pressure from Wednesday's stumble from 8-month highs is promoting cautious activity among buyers, with market talk of China canceling a cargo of previously bought soybeans and mixed signals from outside markets adding to the weakness, analysts said.

 

A quiet news front will bring technical factors into play, with traders looking for signs of upside exhaustion, particularly with fresh speculative money pushing open interest in the market up 50% since March 1, a CBOT floor analyst said.

 

A technical analyst said first resistance for July soybeans is seen at Wednesday's high of US$12.00 3/4 and then at US$12.15. First support is seen at Wednesday's low of US$11.77 3/4 and then at US$11.64.

 

Profit taking remains a threat to upside potential, but bullish fundamentals are expected to keep buyers emerging on price breaks.

 

Uncertainty surrounding 2009 plantings and production is seen as a supportive factor for new crop futures, opening the door for some old/new crop spread unwinding. With large index funds poised to roll nearby July positions, traders will look for opportunities to trim risk exposure in the July contract, analysts added.

 

The July/November bull spread settled at US$1.37 a bushel Tuesday, up from Wednesday's settlement of US$1.43 cents.

 

DTN Meteorlogix Weather said wet conditions over Illinois and Indiana may continue to slow planting progress for both corn and soybeans. However, elsewhere in the Midwest region showers with no significant heat will favor emergence and early growth.

 

Meanwhile, U.S. soybean crushings totaled 140.6 million bushels in April, according to data released by the U.S. Census Bureau Thursday. On average, analysts anticipated a 141.2-million-bushel crush, according to a Dow Jones Newswires survey. Crushings were down from 144.4 million bushels a month earlier, and down from 147.4 million bushels a year earlier. Soymeal stocks for April totaled 421,772 short tonnes, compared to the average estimate of 339,400. Soyoil stocks totaled 3.134 billion pounds. Analysts, on average, expected 3.170 billion pounds.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended flat after moving both ways in volatile trade on contradictory leads, trade participants said.