May 29, 2009

 

CBOT Soy Outlook on Friday: Up; technical strength, outside markets support

 

 

Soybean futures at the Chicago Board of Trade are seen starting Friday's day session higher, with supportive outside market influences attracting speculative buying.

 

CBOT soybean futures are seen opening 7 cents to 10 cents higher, with soy product futures following overnight price action.

 

The combination of firm equities, crude oil and weakness in the U.S. dollar are bullish features expected to buoy prices in early trade, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

Bullish technical momentum and strong export sales for soymeal are supportive factors aiding the higher tone as well, Lespinasse added.

 

A technical analyst said first resistance for July soybeans is seen at this week's high of $12.00 3/4 and then at $12.22. First support is seen at $11.64 and then at this week's low of $11.51.

 

Meanwhile, firm cash prices and lingering planting delays in the eastern Midwest are fundamental features expected to underpin futures also.

 

However, traders remain on guard for signs of upside exhaustion that could ignite profit taking pressure heading into the weekend.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 464,400 metric tonnes for the week ended May 21. Sales for 2008-09 were a net 237,400 metric tonnes. Analysts had forecast sales between 650,000 and 950,000 million metric tonnes.

 

Soymeal sales were a net 367,100 tonnes. Trade estimates ranged from 150,000 to 350,000 tonnes. Soyoil commitments were 5,300 metric tonnes. Analysts had forecast sales between 5,000 and 25,000 tonnes.

 

The July/November bull spread settled at $1.26 a bushel Thursday, down from Wednesday's settlement of $1.37 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.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended higher Friday on spillover pressure from crude oil and a bullish price forecast, said trade participants.