June 5, 2009

 

CBOT Soy Outlook on Friday: Down 5-7 cents; following overnight theme

 

 

Soybean futures at the Chicago Board of Trade is seen starting Friday's day session lower, following the overnight theme amid an absence of fresh bullish news.

 

CBOT soybean futures are seen opening 5 cents to 7 cents lower, with soy product futures following overnight price action.

 

After an impressive rally on Thursday traders need fresh supportive news to feed bullish appetites, a CBOT floor analyst said.

 

End-of-the week position squaring is expected to produce some choppy activity, with traders eyeing activity in outside financial markets for leadership as well, analysts said.

 

Outside markets are providing mixed signals to traders, with support from firmer crude oil and equities offset by a higher U.S. dollar index.

 

The start of the Goldman Sachs Index roll will keep traders attention as well, with bull spreads eyed heading into the weekend.

 

The July/November bull spread settled at US$1.48 1/2 a bushel on Wednesday, up from Thursday's settlement of US$1.35 cents.

 

Nevertheless, tightening old crop supplies will continue to provide underlying support while uncertainties for new crop production limits participants willingness to aggressively sell the market as well, traders said.

 

A technical analyst said first resistance for July soybeans is seen at Thursday's high of US$12.32 and then at US$12.50. First support is seen at US$12.12 3/4 and then at US$12.00.

 

DTN Meteorlogix Weather said increasing rain chances for the northern part of the western Midwest region will ease concerns after the recent drier weather pattern in the area. The northern part of the eastern Midwest looks fairly wet next week and will continue to experience significant field work delays. However, there may be enough warmer and drier weather in the south to allow for some field work between the shower events, Meteorlogix forecasts.

 

In other news, India's soymeal exports in May fell 71% on year to 89,156 metric tonnes due to low arrivals of soybeans in the local market and weak overseas demand, the Soybean Processors Association of India said Friday. Exports of soymeal during April-May declined 80% to 173,050 tonnes, the association said in a statement.

 

India's Ruchi Soya Industries Ltd. (500368.BY), one of the country's largest importers of edible oils, will import about 150,000 tonnes of edible oils in June, 67% more than in the same month a year earlier due to a rise in consumption and the zero import duty, a senior official said Friday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Friday, along with big gains Thursday on CBOT. The benchmark January 2010 soybean contract settled up 1.6% at RMB3,779 a metric tonne. Meanwhile, cash soybean prices in China's major producing areas rose in the week to Friday, along with the rise in futures market and supported by an ongoing drought in the northeastern major producing areas.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, tracking weaker soybean oil futures in after-hours trade and late profit-taking ahead of the weekend, said trade participants. The benchmark August contract on the Bursa Malaysia Derivatives ended MYR49 lower at the intraday low of MYR2,520 a metric tonne.