September 7, 2007

 

CBOT Soy Outlook on Friday: Down 3-5 cents on wheat spillover, profit taking

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session lower, influenced by spillover weakness from wheat and end-of-the-week profit taking.

 

CBOT soybean futures are called to start the session 3 to 5 cents lower.

 

In overnight e-CBOT trading, September soybeans were 3 cents lower at US$8.75, and November soybeans were 5 1/4 cents lower at US$8.87 1/4.

 

The market is poised to drift lower, keeping in step with premium leaving out of the wheat market, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

The absence of fresh supportive news is keeping buyers hesitant, with weekly export sales failing to boost bullish enthusiasm, analysts said.

 

The trade is starting to prepare for next week's crop report, with many traders and analysts anticipating larger yield and output forecasts, Roose said.

 

The U.S. Department of Agriculture is scheduled to release its latest production, yield and supply and demand estimates Wednesday at 8:30 a.m. EDT.

 

A technical analyst said no serious chart damage occurred in Thursday's declines, but market bulls don't want to see a bearish weekly low close on Friday. Market bulls also are warned that more downside pressure in wheat prices will spill over into selling pressure in beans.

 

The next upside price objective for November soybeans is pushing and closing prices above strong resistance at this week's high of US$9.16 1/2. The next downside price objective is closing prices below solid support at US$8.88.

 

First resistance for November soybeans is seen at Thursday's high of US$9.02 and then at US$9.07. First support is seen at Thursday's low of US$8.88 and then at US$8.82.

 

The USDA reported weekly soybean export sales were 566,600 metric tonnes for the week ended Aug. 30. Included in the total were sales of 432,000 metric tonnes for the 2007-08 marketing year. The 2007-08 sales were primarily for China with 211,000 metric tonnes. Analysts had forecast sales between 300,000 and 700,000 metric tonnes. Soymeal sales were a net 81,900 tonnes, and soyoil commitments were 41,900 metric tonnes.

 

The DTN Meteorlogix Weather Service forecast said there is an increase in rain chances for much of the U.S. Midwest during the next three to five days. Some heavy rain is possible. This would be unfavorable for maturing summer crops and early harvests. In the U.S. Delta, there is still some chance for significant rain to occur within this region during the three-to-five day period. This may help improve the condition of any late filling crops.

 

September soybean deliveries totaled 1,516 lots. Customer accounts at Man Professional Clearing were the primary issuers and stoppers of 834 and 922 lots, respectively. The last trade date assigned was Sept. 6.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday on speculative buying due to anticipation of lower output. The benchmark May 2008 soybean contract settled RMB24 after trading between RMB3,865 a tonne and RMB3,927 a tonne. Meanwhile, cash soybean prices in China's major producing regions were little changed in the week ended Friday, as trading was very light due to a lack of supplies, analysts and traders said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended little changed Friday, fluctuating in a narrow range in the absence of fresh fundamental leads, market participants said. The benchmark November contract at the Bursa Malaysia Derivative Exchange traded between MYR2,460 and MYR2,485 a tonne before ending up MYR1 at MYR2,471 a tonne.