August 14, 2009

 

CBOT Soy Outlook on Friday: Seen lower on deliveries, crush data

 

 

Chicago Board of Trade soybean futures are poised for a lower start to Friday's day session, with unexpected deliveries, lower July crush data and bearish weather weighing on prices.

 

CBOT soybean futures are seen opening 10 cents to 15 cents lower. August soybeans are seen 30 cents to 40 cents lower.

 

Friday is the last trading day for August soy futures; the contracts expire at 1:00 p.m. EDT.

 

Overnight, August soybeans tumbled 48 cents on unexpected deliveries.

 

The market will be influenced by fundamental factors Friday, as the combination of weather, crush demand and the willingness of traders to release soybean receipts sending bearish signals to traders, analysts said.

 

"The market is being hit with a one-two punch from surprising deliveries, and crush data well under the average of trade estimates," said Don Roose, president of U.S. Commodities.

 

The trade is starting to factor in that, in three weeks, the first new crop supplies will be harvested and, with favorable weather, yield estimates could balloon in future crop reports, Roose said.

 

Bearish psychology is creeping into the market place, as the absence of fresh bullish factors entice traders into trimming risk exposure.

 

A technical analyst said first resistance for November soybeans is seen at US$10.30 and then at US$10.40. First support is seen at Thursday's low of US$10.16 and then at US$10.05.

 

The DTN Meteorlogix weather forecast said near to above normal temperatures and near to above normal rainfall during the next seven to 10 days will be quite favorable for Midwest crops with warm temperatures improving crop development and rain favoring filling soybeans.

 

National Oilseed Processors Association says 120.920 million bushels of soybeans were crushed in July. That's down from 133.145 million in June, well below the average analyst estimate of 130.5 million. The range of pre-report estimates was 123.0 million to 138 million. Soyoil stocks were pegged at 2.804 billion pounds, down from 2.907 billion in June, and below the average analyst estimate of 2.859 billion. The range of estimates was 2.773 billion pounds to 2.907 billion pounds.

 

In deliveries, August soybean deliveries totaled 227 lots. A customer account at Fortis issued 220 lots, while the house account at Bunge Chicago stopped 55 lots. The last trade date assigned was August 11.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Friday, along with declines in China's stock markets amid concerns that adjustments in monetary policy expected later this year could reduce cash liquidity. The benchmark May 2010 soybean contract settled RMB56 a metric tonne lower at RMB3,785/tonne.

 

Cash soybean prices in China's major producing areas were stable in the week to Friday, as processors were cautious in buying due to uncertainties in the price outlook.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, erasing the previous day's gains in volatile trade as prices caved in under heavy selling pressure due to a fall in soyoil futures while weak external markets weighed on prices. The benchmark October CPO contract on the Bursa Malaysia Derivatives settled MYR74 lower at MYR2,441 a metric tonne.