October 1, 2009

 

CBOT Soy Outlook on Thursday: Down 2-3 cents on seasonal pressure, dollar strength

 

 

Soybean futures on the Chicago Board of Trade are expected to start Thursday's day session lower, following the overnight theme, with seasonal pressure and weakness from outside markets influencing price direction.

 

CBOT soybean futures are seen starting 2 to 3 cents lower.

 

The market will continue to find pressure in front of an expected record fall harvest, analysts said.

 

The prospect for "big supplies" to enter the cash pipeline once the harvest moves into full swing remains an anchor on the market, a CBOT floor analyst said.

 

A firmer U.S. dollar is seen adding weakness to prices, but downside pressure is seen limited amid strong underlying demand and tight availability of near-term supplies in the face of harvest delays in southern U.S. soybean growing areas.

 

Weekly export sales confirmed a strong buying presence in the market, with end users expected to step up buying on price breaks as they await the fall lows to be established.

 

A technical analyst said first resistance for November soybeans is seen at Wednesday's high of US$9.31 1/4 and then at this week's high of US$9.37 1/4. First support is seen at US$9.20 and then at US$9.10.

 

The U.S. Department of Agriculture reported total weekly soybean export sales for the 2009-10 marketing year were a net 1.385 million metric tonnes for the week ended Sept. 24. The primary buyers were China with 808,800 tonnes and unknown destinations with 359,000 tonnes. Analysts had forecast sales between 650,000 and 1,000,000 metric tonnes.

 

Soymeal sales were a net 66,800 tonnes. Trade estimates ranged from 75,000 to 215,000 tonnes. Soyoil commitments were 197,500 metric tonnes. Analysts had forecast sales between 125,000 and 2200,000 tonnes.

 

The DTN Meteorlogix weather forecast said frost and possibly a light freeze occurred in northeast growing areas of the Midwest on Thursday morning, unfavorable for maturing crops. Wet and cool conditions during the next few days also will be unfavorable for maturing crops and the early harvest. Long-range charts suggest a chance for more frosty weather later in the 10-day period.

 

In the Delta, showers and some rain returns to the region Thursday night and early Friday. The weather next week also looks to be wetter. This is unfavorable for maturing crops and will likely mean additional harvest delays, Meteorlogix said.

 

The U.S. Census Bureau Thursday revised its August soyoil stocks estimate to 3.014 billion pounds, down from its preliminary estimate of 3.042 billion pounds, according to the Census Bureau's Fats and Oils stocks report.

 

Commodity brokerage firm FCStone on Wednesday said it estimated U.S. soybean production at 3.329 billion. The firm said it pegged the average soybean yield at 43.4 bushels. The estimates were up from the firm's previous projections and from the U.S. Department of Agriculture's most recent forecasts.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange moved higher Thursday, but thin, range bound trade limited upside despite Wednesday's gains for soyoil and crude oil futures, trade participants said. The benchmark December contract on Bursa Malaysia Derivatives ended MYR10 higher at MYR2,115 a metric tonne.

 

China's soybean, soymeal, soyoil, futures traded on the Dalian Commodity Exchange will close Oct. 1-8 as the exchange will be closed for the National Day and Mid-Autumn Festival holidays.