October 2, 2009

 

CBOT Soy Outlook on Friday: Seen lower, lack fresh support

 

 

Soybean futures at the Chicago Board of Trade are expected to drift lower to start Friday's day session, following the overnight theme in the absence of fresh supportive news.

 

CBOT soybean futures are seen starting 6 to 8 cents lower. In overnight action, Nov. soybeans were 8 cents lower at US$9.10.

 

The combination of outlooks for U.S. soybean inventories to rise on record 2009 production, forecasts for drier harvest weather late next week and weakness from outside markets have futures poised for a lower start, analysts said.

 

Traders are anticipating bearish private production estimates ahead of next week's U.S. Department of Agriculture crop report, with private analytical firm Informa Economics expected to release its latest estimates Friday morning.

 

The potential for drier weather next week is seen opening the door for a pick-up in fall harvest operations. Any "ramp up" in the expected record harvest is expected to keep buyers in a cautious mode, a CBOT floor analyst said.

 

However, price action is expected to remain in a sideways trading range, with downside movement limited by strong underlying demand amid the tight availability of cash soybean inventories in the face of slow early harvest progress.

 

Outside financial markets are seen influencing speculative price action, with a firmer U.S. dollar and weakness in crude oil and equities in early action sending negative waves through the market place, analyst said.

 

A technical analyst said first resistance for November soybeans is seen at Thursday's high of US$9.32 3/4 and then at this week's high of US$9.37 1/4. First support is seen at Thursday's low of US$9.14 3/4 and then at this week's low of US$9.06 1/2.

 

The T-storm Weather forecast said more rain is probable next week for the U.S. Midwest, with temperatures averaging cooler than usual through the middle of next week. An unseasonably cool pattern is probable to begin late next week and continue into mid-month. The cooler pattern late next week is expected to shift substantial rainfall away from corn/ soybeans areas of the Midwest.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange fell to their lowest levels since July 17, falling as much as 4.1% on a likely rise in output and technical selling pressure towards the end of trade, said trade participants. The benchmark December contract on Bursa Malaysia Derivatives ended MYR79 or 3.7% lower at MYR2,036 a metric tonne.

 

Argentine soybean prices fell in the week ended Thursday at the Rosario Grain Exchange amid slack demand from exporters and limited offers from sellers.

 

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.