June 26, 2009

 

CBOT Soy Outlook on Friday: Seen up on dollar, tight old crop stocks

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's day session on firm footing, garnering strength from a weaker U.S. dollar and supportive old crop fundamentals.

 

CBOT soybean futures are seen opening 8 cents to 12 cents higher.

 

The weakness in the dollar will provide early support with tight availability of old crop stocks seen buoying the front end of the market, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

Meanwhile, bull spreads are expected to remain a feature, as favorable weather conditions for late plantings and crop development keep a lid of advances in deferred months, Lespinasse said.

 

The July/November bull spread settled at a new high of US$1.94 a bushel Thursday, up from US$1.77 Wednesday.

 

A quiet news front is not providing any new incentives for the market, with light position evening a possibility ahead of the weekend, and next week's acreage and stocks reports.

 

U.S. Department of Agriculture is scheduled to release its 2009 acreage and quarterly grain stocks reports Tuesday. The average of 15 analyst estimates peg 2009 soy acreage at 78.305 million acres. The figure is above USDA's March 31 prospective plantings estimate at 76.024 million, and 2008's 75.718 million.

 

A technical analyst said first resistance for November soybeans is seen at this week's high of US$10.16 3/4 and then at US$10.25. First support is seen at Thursday's low of US$9.92 1/4 and then at US$9.80.

 

DTN Meteorlogix said dry conditions or just a few light showers, with temperatures above normal are on tap for the U.S. Midwest Friday. Scattered showers and thunderstorms develop from west to east, Saturday, with temperatures near to above normal.

 

Dry weather is forecast for the western Midwest, with showers ending in the east on Sunday. Dry conditions or just a little light rain in the eastern belt on Monday give way to dry weather on Tuesday, Meteorlogix said.

 

On tap for Friday, options on July futures expire.

 

In overseas markets, soybean futures rose on the Dalian Commodity Exchange Friday, fueled by firmer oil prices, a weaker dollar and speculation that the government may be considering more policies to support soybean prices. The benchmark January 2010 soybean contract settled 0.6% higher at RMB3,653 a metric tonne.

 

Cash soybean prices in China's major producing areas were flat in the week to Friday as traders stayed on the sidelines, expecting government policy changes that they hope would support prices.

 

Crude palm oil futures on Malaysia's derivative exchange ended lower Friday in volatile trade on profit taking and liquidation of long positions, trade participants said. The benchmark September contract on the Bursa Malaysia Derivatives ended MYR17 lower at MYR2,319 a metric tonne.