June 1, 2007

 

CBOT Soy Outlook on Friday: Down 1-2 cents, e-CBOT, spillover from grains

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session lower, following the overnight trend, with spillover weakness from grain futures and a lack of fresh supportive news weighing on prices.

 

CBOT soybean futures are called to start the session 1 to 2 cents lower.

 

In overnight e-CBOT trading, July soybeans were 1/4 cent lower at US$8.06 per bushel, and November was 3/4-cent lower at US$8.35 1/2.

 

A quiet news front is seen keeping soybeans relying on the outside leadership of grain futures for direction, with overbought technical signals and the absence of fresh bullish news encouraging light profit taking pressure, analysts said.

 

Favorable near term weather forecasts for newly planted Midwest crops is seen applying mild pressure as well, analysts added. Nevertheless, technical factors will once again influence direction, with bullish long range fundamental outlooks remaining underpinning features to limit downside moves as well as attract buying interest on breaks, a CBOT floor analyst said.

 

A technical analyst said the market continues to maintain upside momentum after some mild profit taking. The next upside price objective for July soybeans is closing prices above solid technical resistance at Thursday's high of US$8.16. The next downside price objective is closing prices below solid support at US$7.90.

 

First resistance for July soybeans is seen at US$8.10 and then at US$8.16. First support is seen at US$8.00 and then at this week's low of US$7.94.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 875,900 metric tonnes for the week ended May 24. Included in the total were sales of 530,600 metric tonnes for the 2007-08 marketing year. The 2007-08 sales were primarily for China with 500,000 metric tonnes. Analysts had forecast sales between 200,000 and 1.100 million metric tonnes. Soymeal sales were a net 70,600 tonnes, and soyoil commitments were 7,600 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said rain and thunderstorms will maintain favorable moisture conditions for emerging and developing crops in the western Midwest through the weekend. In the eastern Midwest, mostly light shower activity and warm temperatures will favor crops during this period but the rain will not be enough to recharge soil moisture, Meteorlogix reports.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Friday amid profit-taking after a choppy, uneventful trading day. The market failed to establish a clear trend, fluctuating between positive and negative territory throughout the day. The benchmark August contract ended at MYR2,562 a metric tonne, down MYR19 from Thursday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Friday as the market eyed movements on the CBOT for direction. The benchmark January 2008 soybean contract settled unchanged at RMB3,312 a metric tonne.

 

Meanwhile, cash soybean prices in China's major producing regions were higher in the week ended Friday, supported by rising demand for soybean oil.