September 3, 2009

 

CBOT Soy Outlook on Thursday: Recovery bounce; export demand, outside support

 

 

Chicago Board of Trade soybean futures are poised for a higher start, recovering from recent setbacks on solid export demand and supportive outside market influences.

 

CBOT soybean futures are seen opening 7 cents to 9 cents higher.

 

Higher than expected weekly export sales, a fresh sale to China and a lack of pressure from outside financial markets are serving as the catalysts to generate upside movement, analysts said.

 

The market has satisfied an objective of extracting premium from prices this week on benign Midwest weather outlooks, and prices have essentially reached a level of equilibrium, a CBOT floor analyst said.

 

Consolidative action is anticipated with traders evening up a few positions heading toward an extended holiday weekend. The absence of fresh bearish news and strong demand will key price strength, but the potential for a record crop is seen limiting upside movement.

 

A technical analyst said first resistance for November soybeans is seen at US$9.67 1/4 and then at US$9.80. First support is seen at US$9.50 and then at US$9.40.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1.049 million metric tonnes for the week ended Aug. 27. Sales for 2009-10 were a net 1.108 million metric tonnes. The primary buyers of new crop sales was China with 447,000 tonnes and unknown destinations 309,500 tonnes. Analysts had forecast sales between 400,000 and 850,000 metric tonnes.

 

Soymeal sales were a net 132,500 tonnes. Trade estimates ranged from 50,000 to 200,000 tonnes. Soyoil commitments were 23,800 metric tonnes. Analysts had forecast sales between 10,000 and 40,000 tonnes.

 

The USDA also announced private export sales of 110,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

The DTN Meteorlogix weather forecast said Thursday's long range charts suggest somewhat cooler conditions returning to the Midwest region during the middle to late part of the 6-10 day period. Crop development will benefit from warmer temperatures until then but may slow again when it turns cooler.

 

CBOT September soyoil deliveries totaled 2,457 lots. Customer accounts at Man Professional Clearing issued 716 lots. The house account at ADM Investor Services stopped 41 lots, while customer accounts at Man Professional Clearing stopped 839 lots. The last trade date assigned was Sept. 2.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, stimulated by a strong rebound in local equity markets. The benchmark May 2010 soybean contract settled RMB29 higher at RMB3,627 a metric tonne.