May 29, 2008

 

CBOT Soy Outlook on Thursday: Down 6-10 cents; overnights, outside market pressure

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session on the defensive, taking its cue from the overnight theme, with the bearish influence of outside inflationary markets expected to weigh on prices, analysts said.

 

CBOT soybean futures are called to start the session 6 to 10 cents lower. In overnight electronic trading, July soybeans were 6 3/4 cents lower at US$13.66, November soybeans were 9 cents lower at US$13.48 1/4. July soyoil was 62 points lower at 62.03 cents per pound and July soymeal was US$2.00 lower US$341.70 per short tonne.

 

Soybean futures will start out watching the movements of outside market influences in the absence of fresh fundamental news, with lower crude oil and precious metal prices in conjunction with a firmer U.S. dollar index expected to attract speculative selling, said U.S. Commodities' Don Roose.

 

Month-end position evening will be an issue as well, with traders looking to close out some contracts for book purposes, Roose added.

 

Weather forecasts calling for a warmer and drier trend in the Midwest moving into next week is seen beneficial to planting progress and emergence and may lend pressure to prices also, traders said.

 

However, a slow planting pace in the eastern Midwest and worries that the prolonged farmer strike issues in Argentina will support U.S. export demand and put further pressure on an already tight U.S. balance sheet is seen underpinning prices, traders added.

 

A technical analyst said the next downside price objective for July soybeans is pushing and closing prices below solid technical support at last week's low of US$13.12 1/2. The next upside price objective is to push and close prices above psychological resistance at US$14.00 a bushel.

 

First support for July soybeans is seen at US$13.60 and then at US$13.50. First resistance is seen at Wednesday's high of US$13.85 and then at this week's high of US$13.90.

 

In other news, private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tonnes of soybeans for delivery to China during the 2008-2009 marketing year, the USDA said Thursday. USDA also reported the sale of 120,000 tonnes of U.S. soybeans to unknown destinations for delivery in the 2008-09 marketing year.

 

In overseas markets, China's soymeal futures traded on the Dalian Commodity Exchange settled slightly higher Thursday on tight cash supply, despite a temporary import tariff cut that will go into effect June 1. The benchmark September 2008 contract settled RMB10, or 0.3%, higher at RMB3,734 a metric tonne. Soybean prices were mostly lower. The benchmark January 2009 soybean contract settled RMB8 lower at RMB4,569/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower on speculative selling and a lack of support from fundamentals after tracking soyoil's early rise and subsequent fall, said trade participants. The benchmark August CPO futures contract on Bursa Malaysia Derivatives ended MYR22 lower at MYR3,565 a metric tonne.