September 18, 2009

 

CBOT Soy Outlook on Friday: Down 3-5 cents on non-threatening crop weather

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's day session on the defensive, following the overnight theme, with a lack of a weather threat keeping pressure on prices.

 

CBOT soybean futures are seen starting 3 to 5 cents lower.

 

Weather forecasts pointing to no threat of a frost or freeze occurring in the Midwest for the next two-weeks are seen providing fundamental pressure for prices, analysts said.

 

Warm weather and ample sunshine this week was seen aiding crop development and served as another bearish factor for the market.

 

Bearish outside financial market influences, with a firm U.S. dollar and weakness in crude oil futures is seen adding to the lower tone.

 

However, with the U.S. soybean crop needing to avoid a yield robbing freeze before October in order to reach record potential, downside risks are expected to remain limited, a CBOT floor analyst said. Strong export demand remains an underpinning feature in the market as well.

 

A technical analyst said first resistance for November soybeans is seen at Thursday's high of US$9.62 3/4 and then at US$9.70. First support is seen at Thursday's low of US$9.37 1/4 and then at US$9.28 1/4.

 

The DTN Meteorlogix weather forecast said crops in the U.S. Midwest region will continue to benefit from near-to-above normal temperatures for at least the next 5-7 days. Wet weather early next week may be unfavorable for maturing crops or any early harvests, especially in the west and south.

 

In the U.S. Delta, moderate to locally heavy showers continue for another day or two before diminishing Sunday and Monday. However, there is at least some risk for more heavy rain next week. Rain likely causes delays to the early soybean harvest, Meteorlogix said.

 

In demand news, private exporters reported to the U.S. Department of Agriculture export sales of 182,000 metric tonnes of Soybeans for delivery to China during the 2009/2010 marketing year, the USDA said Friday.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange Friday were higher on follow-through buying after Heilongjiang province's frost warning Thursday. Although some position squaring occurred due to spillover weakness from Chinese equity markets. The benchmark May 2010 soybean contract settled 1.5% higher at RMB3,735 a metric tonne.

 

Cash soybean prices in China's major producing areas were slightly higher in the week to Friday due to a lack of soybean supply as the new harvesting season has yet to begin.

 

Meanwhile, representatives of the largest soybean-buying companies in China, touring the rural U.S., expressed keen interest in the ability of U.S. farmers to meet the country's demand, a vice president of the American Soybean Association said Thursday. The delegation represented firms responsible for 85% of all Chinese soybean imports.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday as investors covered shorts ahead of the long weekend, said trade participants. The new benchmark December CPO contract on the Bursa Malaysia Derivatives ended MYR8 up at MYR2,190 a metric tonne.