September 4, 2009

 

CBOT Soy Outlook on Friday: Mixed; consolidation ahead of long weekend

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's day session mixed, as the market consolidates in front of an extended holiday weekend.

 

CBOT soybean futures are seen opening 2 cents higher to 2 cents lower.

 

Heading into a long weekend, traders are expected to take a cautious approach, as the risk of changing weather forecasts and oversold technical conditions is expected to produce consolidative action, analysts said.

 

CBOT markets will closed for Sunday evening and the Monday day session in observance of the Labor Day Holiday.

 

Large production outlooks, no real frost threats, and harvest activity in the Deep South is expected to remain an anchor on prices, said Don Roose, president of U.S. Commodities.

 

On Thursday, a sharp drop in interior basis levels is a reminder that harvesting is underway in the south, Roose said.

 

However, the forecast for the Midwest could change during the long weekend for a crop in need of escaping a freeze before October. This is expected to entice traders into evening some positions after extracting weather premium from prices throughout the week.

 

A technical analyst said first resistance for November soybeans is seen at US$9.50 and then at Friday's high of US$9.62 3/4. First support is seen at Thursday's low of US$9.29 1/2 and then at US$9.20.

 

The T-storm Weather forecast said temperatures in the Midwest will average near normal through early next week as the latest air mass continues to slowly warm. Any frost threats stay north of U.S. and Canada crops. Otherwise, a weak cool remains likely to slide across the central U.S. from Tuesday through Thursday. A round of thunderstorms will affect most Midwest areas, T-storm Weather said.

 

CBOT September soyoil deliveries totaled 2,077 lots. Customer accounts at Man Professional Clearing issued 921 lots, while stopping 1,164 lots. The last trade date assigned was Thursday.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Friday, tracking losses in CBOT soybeans overnight, with further downside likely in coming days due to weak demand, analysts said. The benchmark May 2010 soybean contract settled 1.0% lower at RMB3,590 a metric tonne.

 

Cash soybean prices in China's major producing regions remained little changed in the week ended Friday, with high inventories of soyoil limiting demand from crushers, traders and analysts said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended sharply lower Friday for the fourth consecutive day as speculative investors liquidated long positions towards the end of trade on the BMD, said trade participants. The benchmark November CPO contract on the Bursa Malaysia Derivatives ended MYR21 lower at MYR2,197 a metric tonne.