September 25, 2009

 

CBOT Soy Outlook on Friday: Drifting lower; favorable finishing weather

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session with modest declines, continuing to come under pressure from favorable late season crop growing weather.

 

CBOT soybean futures are seen starting 3 to 5 cents lower. In overnight action, Nov soybeans were 3 cents lower at US$9.16 1/2.

 

A quiet news front is seen keeping attention on the potential for the 2009 crop to finish, with minimal frost threats for the heart of the Midwest promoting record production forecasts, analysts said.

 

Weakness in crude oil and precious metals are expected to aid the defensive tone. However, futures are seen holding within their recent trading ranges, struggling to break out of a sideways theme amid a lack of fresh fundamental news.

 

Solid underlying demand and tight availability of nearby supplies remain supportive features, but record crop potential remains an offsetting influence to the bullish inputs, analysts said.

 

A technical analyst said the next upside technical objective for Nov soybeans is to push and close prices above solid technical resistance at last week's high of US$9.77 3/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the September low of US$8.92 a bushel.

 

First resistance for November soybeans is seen at Thursday's high of US$9.29 3/4 and then at US$9.40. First support is seen at US$9.09 1/4 and then at this week's low of US$9.02.

 

The DTN Meteorlogix weather forecast said rains over the western Midwest Friday and then again later next week may mean delays to early fall field work. Cooler temperatures early next week are not expected to be damaging, and crops should continue to mature in the absence of a significant freeze during the next 10 days.

 

In the Delta, the region should be drier after Friday until a cold front moves in later next week. Conditions should slowly improve after recent heavy rains for the maturing crops and harvest, Meteorlogix said.

 

In other news, India has contracted to export 600,000-700,000 metric tonnes of the new soymeal crop during November-December, a senior industry official said Friday.

 

In overseas markets, soybean futures drifted lower on the Dalian Commodity Exchange Friday, lacking real direction as a stronger dollar added to uncertainties over weather and crop sizes. The benchmark May 2010 soybean contract settled 0.3% lower at RMB3,625 a metric tonne.

 

Cash soybean prices in China's major producing areas rose slightly in the week ended Friday, as import prices inched down on favorable U.S. weather reports.

 

Crude palm oil futures on Malaysia's derivatives exchange rebounded Friday as investors covered shorts and amid spillover support from a recovery in crude oil prices, said trade participants. The benchmark December contract on the Bursa Malaysia Derivatives ended MYR71 or 3.2% higher at MYR2,186 a metric tonne.