August 6, 2009

 

CBOT Soy Outlook on Thursday: Lower; lack of clear weather threat

 

 

Chicago Board of Trade soybeans are expected to open lower Thursday following overnight losses and the lack of a clear weather threat, analysts said.

 

Soybeans are called 10 to 15 cents lower. In overnight trading, September soybeans were down 13 cents to US$10.75 per bushel and November soybeans were down 12 3/4 cents to US$10.32 1/4.

 

September soymeal was down US$5.90 to US$335.70 per short tonne and September soyoil was down 35 points to 37.31 cents per pound.

 

Recent concerns about heat damaging the crop have abated for the moment, analysts say, as hot weather through the weekend in the U.S. Midwest is expected to be accompanied by episodes of showers and thunderstorms.

 

The market could remain under pressure through the end of the week if forecasts continue to call for rain, an analyst said.

 

A stronger dollar and weaker crude oil helped pressure the market overnight, but don't appear as bearish Thursday morning, an analyst said.

 

"I don't think we'll be as weak as we ended overnight," said Terry Reilly, analyst for Citigroup. "There's not too much going on out there, and there's a pickup in export development."

 

The U.S. Department of Agriculture reported net sales of 2.905 million metric tonnes for the week ended July 30. That included sales of 2.41 million for the 2009-10 marketing year.

 

Analysts had expected huge sales this week due to last week's announcement of purchases from China, but the total exceeded expectations of between 2.2 million and 2.5 million tonnes.

 

The USDA reported net soymeal exports of 102,400 metric tonnes for the week ended July 30, including 160,000 for the 2009-10 marketing year and a net loss of 57,600 for the 2008-09 marketing year.

 

Soyoil net exports were 82,100 for the week, with all but 1,200 of that total coming from the 2008-09 marketing year.

 

The next upside price objective for the bean bulls is to push and close November prices above the June 18 swing high at US$10.57, a technical analyst said. The next downside price objective for the bears is pushing and closing prices below solid technical support at US$10.00 a bushel.

 

First resistance for November soybeans is seen at Wednesday's high of US$10.48 1/2 and then at US$10.57, the technical analyst said. First support is seen at US$10.23 3/4 and then at US$10.15.

 

In other news, National Commodities Supply Corp., or Conab, Thursday estimated Brazil's 2008-09 soy crop at 57.1 million metric tonnes, 4.8% below the 2007-08 harvest of 60 million tonnes but unchanged from last month's forecast.

 

In international markets, Soybean futures fell on the Dalian Commodity Exchange Thursday, dragged by a broad retreat among commodities after China's central bank said Wednesday it would "fine-tune" domestic policy to control rising prices, which some interpreted as code for potentially tightening credit.

 

The benchmark January 2010 soybean contract fell 1% to RMB3,699 a metric tonne.

 

Also, crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday as investors took profits from yesterday's gains while a fall in soyoil and crude oil pressured prices.