July 27, 2007

 

CBOT Soy Outlook on Friday: Down 2-3 cents; e-CBOT, pre-weekend positioning

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session lower, following the lead of overnight price action, with pre weekend positioning expected to be featured, analysts said.

 

CBOT soybean futures are called to start the session 2 to 3 cents lower.

 

In overnight e-CBOT trading, August soybeans were 3 1/2 cents lower at US$8.18 per bushel, and November was 2 cents lower at US$8.44 1/2.

 

A quiet news front is providing little fresh direction for prices, with traders expected to square a few positions ahead of the weekend in an effort to take precaution in the event of a change in weather forecasts during the weekend, analysts said.

 

Another choppy theme is expected as the market maintains its consolidation theme, with prices continuing to hover within the week's sideways trend, traders said.

 

Meanwhile, longer range fundamental and weather outlooks are seen keeping a floor under prices, with worries over dryness in parts of Minnesota, and talk of aphid infestation in Iowa keeping traders on guard as crops move into their critical pod filling stage of development, a CBOT floor analyst said.

 

A technical analyst said the next downside price objective for November soybeans is closing prices below solid support at this week's low of US$8.34. The next upside price objective is closing prices above solid technical resistance at US$8.69 1/2, which would fill on the upside this week's downside price gap on the daily bar chart.

 

First resistance for November soybeans is seen at Thursday's high of US$8.55 and then at US$8.60. First support is seen at US$8.40 and then at Thursday's low of US$8.34.

 

The DTN Meteorlogix Weather Service forecast said showers may linger in the southern parts of the western Midwest Friday morning, with mainly dry conditions elsewhere in the region. There is a chance for thunderstorms in the central Nebraska area during the weekend. Some of this activity may move as far east as eastern Nebraska, with little elsewhere in the region. Temperatures will average near to below normal Friday, and near to above normal during the weekend.

 

In the eastern Midwest, showers and thundershowers are seen for an area from southern and eastern Illinois eastward to Ohio and southeast Michigan Friday. Showers may linger near the Ohio River early Saturday, before turning dry late Friday. Mainly dry conditions are on tap for Sunday. Temperatures will average near to above normal, with the warmest readings in far southern areas. Mainly dry weather is forecast for Monday and Tuesday. Temperatures will average near to above normal with highs ranging from the middle 80s to a few low 90s Fahrenheit.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended slightly higher Friday amid continued optimism about demand from major buyers like China and India. The benchmark October contract ended at MYR2,583 a metric tonne, up MYR15 from Thursday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Friday after a quiet session in CBOT soybeans Thursday. The benchmark January 2008 soybean contract settled RMB1 higher at RMB3,307 a metric tonne.

 

Cash soybean prices in China's major producing regions were stable in the week ended Friday as farmers and traders were reluctant to sell due to few stocks at hand.