July 2, 2009

 

CBOT Soy Outlook on Thursday: Seen lower; improved weather, outside markets

 

 

Soybean futures at the Chicago Board of Trade are poised for a lower start to Thursday's day session, under pressure from bearish outside market influences and improved near-term weather.

 

CBOT soybean futures are seen opening 15 cents to 18 cents lower.

 

Morning weather maps are more favorable for developing crops across the Midwest and Delta, and with a stronger dollar and weakness in crude oil and equities, a defensive tone is setting in, said Don Roose, president of U.S. Commodities.

 

Traders are looking to take some premium out of prices, but the declines will be limited by razor tight old crop supplies and strong weekly export sales showing the market is not rationing export demand yet, Roose said.

 

Nevertheless, position squaring ahead of an extended holiday weekend, particularly following Wednesday's sharp gains, will provide some weakness.

 

CBOT markets will be closed Friday in observance of the U.S. Independence Day holiday.

 

A technical analyst said first resistance for November soybeans is seen at Wednesday's high of US$10.29 1/4 and then at US$10.50. First support is seen at US$10.00 and then at Wednesday's low of US$9.81 1/2.

 

DTN Meteorlogix said generally favorable weather conditions are on tap for developing Midwest soybeans is expected to continue during the next 7 days with no significant hot weather and with periodic shower activity. There appears to be some chance for hotter weather later in the 10 day period, but its not expected to last to long.

 

In the U.S. Delta where the first new crop beans are historically harvested, there is a chance for scattered showers to develop during the weekend. This will help to cool temperatures and ease stress to developing soybeans, Meteorlogix said.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 443,600 metric tonnes for the week ended June 25. Sales for 2008-09 were a net 193,500 metric tonnes. China bought 68,600 tonnes of old crop beans, including 58,000 switched from unknown destinations. Analysts had forecast sales between 100,000 and 425,000 metric tonnes.

 

Soymeal sales were a net 280,800 tonnes. Trade estimates ranged from 75,000 to 300,000 tonnes. Soyoil commitments were 70,600 metric tonnes. Analysts had forecast sales between zero and 60,000 tonnes.

 

The U.S. Census Bureau Thursday revised its May soyoil stocks estimate to 3.193 billion pounds, down slightly from its preliminary estimate of 3.195 billion pounds, according to the Census Bureau's Fats and Oils stocks report.

 

In deliveries, July soyoil deliveries totaled 4,793 lots. Customer accounts at Man Professional Clearing issued 2,368 lots, while stopping 2,225 lots. The last trade date assigned was July 1.

 

In overseas markets, soybean futures settled slightly higher on the Dalian Commodity Exchange Thursday, despite closing in negative territory on a bout of technical selling after Wednesday's bounce from a key U.S. Department of Agriculture report. The benchmark January 2010 soybean contract settled 0.2% higher at RMB3,697 a metric tonne.

 

Crude palm oil futures on Malaysia's derivative exchange fell as much as 4% Thursday, with investors liquidating long positions when prices breached key support at MYR2,200 a metric tonne. The benchmark September contract on the Bursa Malaysia Derivatives ended MYR84 lower at MYR2,175 a metric tonne.