September 17, 2009

 

CBOT Soy Outlook on Thursday: Diminished frost threat to weigh on prices

 

 

The absence of a serious frost threat is expected to pressure Chicago Board of Trade soybean futures on the opening of Thursday's day session.

 

CBOT soybean futures are seen starting 7 to 10 cents lower.

 

The market has some bearish influences poised to weigh on prices, with diminished frost chances, weakness in outside markets and a lack of any surprises in weekly export sales leaving the market on the defensive, said Dax Wedemeyer, analyst with U.S. Commodities.

 

The cold weather that was expected to threaten some Midwest crops late next week is seen staying north of the Midwest, leading traders to extract the risk premium put in on the frost scare earlier in the week, Wedemeyer said.

 

Otherwise, the market lacks any fresh stimulus to provide direction, as traders keep a close eye on weather amid the continued uncertainty about the size of the U.S. crop.

 

The DTN Meteorlogix weather forecast said crops in the Midwest region will continue to benefit from near to above normal temperatures for at least the next 5-7 days. The chance for significantly cooler conditions later next week has diminished from where it was during the past couple of days.

 

A technical analyst said first resistance for November soybeans is seen at Wednesday's high of US$9.60 3/4 and then at US$9.70. First support is seen at US$9.40 and then at Wednesday's low of US$9.28 1/4.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 704,400 metric tonnes for the week ended Sept 10. Sales for delivery in the 2009-10 marketing year totaled 484,400 tonnes, with China the primary buyer of 463,400 tonnes. Analysts had forecast sales between 550,000 and 900,000 metric tonnes.

 

Soymeal sales were a net 115,100 tonnes. Trade estimates ranged from 75,000 to 240,000 tonnes. Soyoil commitments for the 2009-10 marketing year were 29,900 tonnes, while 2010-11 commitments were net sales reductions of 16,900 tonnes. Analysts had forecast sales between 10,000 and 30,000 tonnes.

 

USDA also announced Thursday, private exporters reported the sale of 121,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

In overseas markets, soybean futures rose on the Dalian Commodity Exchange Thursday after the country's largest soybean-producing province issued a frost warning. The benchmark May 2010 soybean contract settled 0.8% higher at RMB3,680 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended little changed Thursday as investors liquidated positions ahead of Eid celebrations, said trade participants. The new benchmark December CPO contract on the Bursa Malaysia Derivatives ended MYR1 up at MYR2,182 a metric tonne.