August 13, 2009

 

CBOT Soy Outlook on Thursday: Up 15-17 cents; outside market support, export sales

 

 

Chicago Board of Trade soybean futures are poised for a higher start to Thursday's day session, bolstered by bullish financial market influences and supportive weekly export sales.

 

CBOT soybean futures are seen opening 15 cents to 17 cents higher.

 

Follow through buying from Wednesday's late recovery is seen carrying prices higher, with weakness in the U.S. dollar, and strength in crude oil and equities attracting buying interest, said Victor Lespinasse, analyst with Grainsanalyst.com.

 

Outside macro markets is the catalyst for the gains, with uncertainty surrounding 2009 crop production serving as the fundamental backdrop to underpin prices.

 

Near term weather for developing crops remains favorable, but with crop maturity lagging and needing an extended growing season, traders are unwilling to press the market, Lespinasse said.

 

Meanwhile, solid export demand continues to buoy prices, with an erratic Indian monsoon seen as a potential boost to U.S. soyoil demand, analysts said.

 

A technical analyst said first resistance for November soybeans is seen at Wednesday's high of US$10.55 and then at US$10.75. First support is seen at US$10.30 and then at US$10.20.

 

The DTN Meteorlogix weather forecast said recent and forecasted rainfall in the U.S. Midwest will maintain mostly favorable soil moisture levels for filling crops although parts of northeast Indiana and northwest Ohio remain on the dry side. A turn to cooler weather later next week would slow crop development, Meteorlogix said.

 

India's annual monsoon rains were 56% below normal during the week ended Aug. 12, compared with a deficit of 64% the previous week, according to data from the India Meteorological Department Thursday.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,021,900 metric tonnes for the week ended August 6. Sales for 2009-10 were a net 762,400 metric tonnes. The primary buyers of new crop sales were unknown destinations with 371,000 metric tonnes and China bought 290,000 tonnes. Analysts had forecast sales between 250,000 and 1,000,000 metric tonnes.

 

Soymeal sales were a net 55,900 tonnes. Trade estimates ranged from 75,000 to 250,000 tonnes. Soyoil commitments were 5,200 metric tonnes. Analysts had forecast sales between 20,000 and 50,000 tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled slightly lower Thursday, as funds switched to corn futures on concerns about drought in China's main soybean and corn producing areas in the northeast. The benchmark May 2010 soybean contract settled down RMB5 a metric tonne at RMB3,841/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange rose 2.3% Thursday in volatile trade Thursday as investors covered short positions, amid spillover support from a rebound in regional stock markets and soyoil. The benchmark October CPO contract on the Bursa Malaysia Derivatives settled MYR55 higher at MYR2,515 a metric tonne.