June 19, 2009

 

CBOT Soy Outlook on Friday: Steady to 3 cents up; outside market support

 

 

Soybean futures on the Chicago Board of Trade is seen starting Friday's day session steady to 3 cents higher, garnering strength from supportive outside market influences.

 

A quiet news front is expected to keep attention on outside market movements, as traders await fresh news to provide leadership for futures, analysts said.

 

In early market action, the U.S. dollar is lower, and crude oil and futures for equities are higher.

 

Light end-of-the-week position evening following a week of lower price action is expected to generate underlying support. For the week, July soybeans are 31 1/4 cents lower, and November soybeans are down 33 1/4 cents.

 

Bullish old crop supply and demand fundamentals remain supportive features, but without fresh news, traders are expected to take a cautious approach heading toward key acreage and stocks reports June 30.

 

Traders are also awaiting private acreage estimates ahead of the reports, with private analytical firm Informa Economics expected to release its corn and soybean acreage estimates near 11:30 a.m. EDT.

 

Otherwise technical factors are expected to draw attention in the absence of fresh news, with traders also focusing on Midwest weather as farmers attempt to finalize 2009 plantings.

 

A technical analyst said first resistance for November soybeans is seen at Thursday's high of US$10.57 and then at US$10.75. First support is seen at Thursday's low of US$10.38 3/4 and then at US$10.25.

 

DTN/Meteorlogix said there is potential for hotter and drier weather in the U.S. Midwest region while a ridge moves in over the eastern plains and western Midwest later this weekend and Monday. However, when the ridge shifts to the west, the Midwest should see more thunderstorm activity and a little cooler weather returning, DTN/Meteorlogix forecasts.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange were unchanged Friday amid thin trade, with conflicting supply signals resulting in a lack of clear direction. The benchmark January 2010 soybean contract settled at RMB3,646 a metric tonne.

 

Meanwhile, cash soybean prices in China's major producing areas dipped slightly in the week to Friday, as the prospect of rising imports pressured prices.

 

Crude palm oil futures on Malaysia's derivatives exchange fell further Friday as investors liquidated positions on reports that India has deferred some of the June shipments that were previously booked, trade participants said. The benchmark September CPO contract on Bursa Malaysia Derivatives ended 14 ringgit lower at MYR2,285 a metric tonne.