July 31, 2009

 

CBOT Soy Outlook on Friday: Seen up on follow through buying

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session higher on follow-through buying from Thursday and underlying support from a weaker U.S. dollar.

 

CBOT soybean futures are seen opening 3 cents to 6 cents higher.

 

CBOT soybean prices were mixed overnight. August was 1 1/4 cent a bushel lower at US$11.27 while November climbed 2 3/4 cents to US$9.73 3/4.

 

The combination of the weaker dollar and bullish underlying fundamentals are seen underpinning futures in early action, analysts said.

 

However, in the absence of fresh news to feed bullish appetites, end-of-the-week and month position evening may emerge following Thursday's impressive rally, a CBOT floor analyst said.

 

Nevertheless, bull spreading is expected to remain a feature, as tight old crop stocks and strong demand buoy nearby contracts, while a lack of weather threats take some edge off deferred month futures.

 

Otherwise, traders will keep an eye on outside market movement and possible shifts in weather forecasts before taking on added risk heading into the weekend, a floor broker said.

 

A technical analyst said the next upside price objective for the market is to push and close November prices above major psychological resistance at US$10.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.20 a bushel.

 

DTN Meteorlogix said below normal temperatures will continue to slow Midwest crop development during the next five days. There is some chance for a more favorable temperature pattern longer range but this is uncertain. There is no significant heat stress expected during the next 7-10 days. August soyoil deliveries totaled 3,990 lots. Customer accounts at Man Professional Clearing issued 734 lots while stopping 2,184 lots. The last trade date assigned was July 30.

 

In other news, the Chinese government will continue its sales of corn and soybeans from reserves next week, according to an official statement Friday. The government plans to sell 2 million metric tonnes of corn and 500,000 tonnes of soybeans in major producing areas, the same as planned in the previous weekly sales, according to the statement published on China National Grain and Oils Information Center's Web site.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Friday on high liquidity and tracking an overall rise in commodities and equities markets. The benchmark May 2010 soybean contract settled RMB63 higher at RMB3,590 a metric tonne, or up 1.8%. Cash soybean prices in China's major producing areas were slightly lower in the week ended Friday, pressured by government sales.

 

Crude palm oil futures on Malaysia's derivatives exchange rose as much as 4.8% Friday as investors covered shorts on improved exports and spillover support from soyoil prices. The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR44 higher at MYR2,189 a metric tonne.