October 5, 2007

 

CBOT Soy Outlook on Friday: Flat, down; e-CBOT, consolidation continues

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session steady to lower, following the overnight theme as the market continues to consolidate following previous volatile price moves.

 

CBOT soybean futures are called to start the session flat to 2 cents lower.

 

In overnight e-CBOT trading, November soybeans were unchanged at US$9.54 1/4, and January soybeans were 1 1/2 cents lower at US$9.70 3/4.

 

A quiet news front is not providing much leadership for futures, with many traders seemingly content to sit on the sidelines until fresh fundamental influences surface to spark momentum, analysts said.

 

Bullish underlying fundamentals amid tightening stocks and strong demand remain supportive features, but without fresh inputs and weakness in outside markets, futures seem poised for another sideways standoff as traders trim risk heading into the weekend, analysts added.

 

A technical analyst said market bulls need to watch out for a bear flag or bearish pennant pattern forming on the daily bar chart. Bears can argue that Thursday's and Wednesday's gains were just a pause after huge losses on Tuesday, he said. The next upside price objective for November soybeans is to push prices above solid resistance at US$9.90 1/2, which is the top of this week's big downside price gap on the daily bar chart. The next downside price objective is closing prices below solid support at this week's low of US$9.34 1/2.

 

First resistance for November soybeans is seen at Thursday's high of US$9.58 1/2 and then at US$9.70. First support is seen at US$9.50 and then at Thursday's low of US$9.46 1/2 and then at US$9.42.

 

The DTN Meteorlogix Weather Service forecast calls for hot and isolated showers over Brazil's Mato Grosso do Sul, Mato Grosso and southwest Goias for another 7 days. High temperatures from the upper 90s to the low 100s Fahrenheit continue. Friday's long range charts suggest a chance for shower activity late next week or during next weekend. However, Meteorlogix cautions that this is a long range forecast and subject to significant day to day changes. Any significant soybean planting cannot take place until the rains arrive, Meteorlogix added.

 

October soyoil deliveries totaled 2,717 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 1,229 and 920 lots respectively. The last trade date assigned was October 4.

 

October soymeal deliveries totaled 1,351 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 4.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange swung sharply to end lower Friday on heavy profit-taking ahead of the weekend, despite strong fundamentals, market participants said. The benchmark December contract on the Bursa Malaysia Derivatives traded higher most of the day but ended down MYR29 at MYR2,570/tonne, the intraday low.