September 24, 2009

 

CBOT Soy Outlook on Thursday: Lower; outside markets, weather threat mild

 

 

The combination of only a mild weather threat to U.S. Midwest crops and strength in the U.S. dollar have Chicago Board of Trade soybean futures poised for a lower start to Thursday's day session.

 

CBOT soybean futures are seen starting 3 to 5 cents lower. In overnight action, November soybeans were 7 1/2 cents lower at US$9.13.

 

The absence of a definitive frost threat to soybean crops in the heart of the Midwest continues to apply pressure to prices, and without a boost from outside markets, buyers have little incentive to aggressively push upward movement, analysts said.

 

Nevertheless, strong underlying demand and lingering concern about tight availability of near term supplies amid early harvest delays in the Delta are supportive features providing price strength, analysts added.

 

A choppy tone is expected, with traders eyeing weather forecasts for potential trend reversing price movement.

 

A technical analyst said first resistance for November soybeans is seen at Wednesday's high of US$9.26 and then at US$9.40. First support is seen at US$9.09 1/4 and then at Wednesday's low of US$9.02.

 

The T-storm Weather forecast said scattered showers affect the central U.S. through Saturday; while harvesting in the Delta remains limited. Temperatures in the 30s Fahrenheit will affect the northeast third of the Corn Belt early next week, with a killing frost north of most Midwest crop areas.

 

A milder and drier pattern is on tap for later next week, improving conditions for maturation and harvesting. A cooler pattern is probable next weekend, but a killing frost is far from imminent in the U.S., T-storm Weather said.

 

The U.S. Department of Agriculture reported total weekly soybean export sales for the 2009-10 marketing year were a net 1.152 million metric tonnes for the week ended Sept. 17. The primary buyer was China with 654,500 tonnes. Analysts had forecast sales between 550,000 and 850,000 metric tonnes.

 

Soymeal sales were a net 170,700 tonnes. Trade estimates ranged from 70,000 to 190,000 tonnes. Soyoil commitments were 106,200 metric tonnes. Analysts had forecast sales between 15,000 and 50,000 tonnes.

 

USDA also announced private exporters reported the sale of 20,000 metric tonnes of soybean oil for delivery to unknown destinations during the 2009-10 marketing year.

 

U.S. soybean crushings totaled 119.8 million bushels in August, according to data released by the U.S. Census Bureau Thursday. On average, analysts anticipated a 118.9 million-bushel crush, according to a Dow Jones Newswires survey. The data are a reflection of slower processor activity due to limited soybean availability, analysts said. Crushings were down from 128.8 million bushels a month earlier, and from 128.7 million bushels a year earlier. Soymeal stocks for August totaled 316,279 short tonnes, compared with the average estimate of 307,000. Soyoil stocks totaled 3.042 billion pounds. Analysts, on average, expected 3.079 billion pounds.

 

In overseas markets, soybean futures fell on the Dalian Commodity Exchange Thursday, extending losses as funds took profits ahead of the eight-day national celebrations starting Oct. 1. The benchmark May 2010 soybean contract settled 1.8% lower at RMB3,636 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange extended the previous day's losses Thursday as weak commodity markets prompted profit-taking and long liquidation, said trade participants. The benchmark December contract on the Bursa Malaysia Derivatives ended MYR31 lower at MYR2,115.