October 8, 2009

 

CBOT Soy Outlook on Thursday: Seen up as outside markets buoy prices

 

 

Chicago Board of Trade soybean futures are expected to begin Thursday's day session higher, buoyed by broad-based commodity strength.

 

CBOT soybean futures are seen starting 3 cents to 4 cents higher. In overnight action, November soybeans were 4 1/2 cents higher at US$9.16 1/2.

 

"Weakness in the U.S. dollar is the headliner sending all commodities higher," said Victor Lespinasse, analyst with Grainanalyst.com.

 

The slide in the dollar is seen attracting buying from the investment community, as they use commodities as a hedge against inflation, analysts said.

 

Futures are garnering fundamental support from rain delaying harvests and the threat of cold Midwest weather taking the top off yields in immature soybean crops. However, the market has priced in the weather issues this week, and with a record crop looming upside potential maybe limited, Lespinasse said.

 

The evening of positions ahead of Friday's crop reports will provide for some choppy action, as traders remain a little cautious ahead of the government's updates on production, yield and supply and demand, Lespinasse added.

 

A technical analyst said first resistance for November soybeans is seen at this week's high of US$9.21 and then at US$9.33. First support is seen at US$9.00 and then at the September low of US$8.92.

 

The DTN Meteorlogix weather forecast said heavy rains through southern and eastern growing areas will mean significant delays to field work. The potential for a moderate to heavy freeze in the Midwest is highest to the west of the Mississippi river, likely ending the growing season in these areas with potential for damage to immature crops, especially in the north. Frost is likely east of the Mississippi river but subfreezing temperatures may be confined to the north and northwest growing areas, Meteorlogix said.

 

In the Delta, wet weather during the week will be unfavorable for maturing soybeans. It should also delay the soybean harvest, but drier weather is possible beginning this weekend and continuing into next week.

 

The U.S. Department of Agriculture reported total weekly soybean export sales for the 2009-10 marketing year were a net 451,000 metric tonnes for the week ended Oct. 1. The primary buyer was China with 219,600 tonnes. Analysts had forecast sales between 650,000 and 950,000 metric tonnes.

 

Soymeal sales were a net 123,300 tonnes. Trade estimates ranged from 50,000 to 240,000 tonnes. Soyoil commitments were 48,300 metric tonnes. Analysts had forecast sales between 20,000 and 110,000 tonnes.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended lower Thursday, weighed down by long liquidation, profit taking and weak supply-demand fundamentals, said market participants. The benchmark December contract on Bursa Malaysia Derivatives ended MYR47 or 2.3% lower at MYR2,030 a metric tonne.

 

China's soybean, soymeal, soyoil futures traded on the Dalian Commodity Exchange were closed overnight, as the exchange is closed for the National Day and Mid-Autumn Festival holidays.