October 16, 2009

 

CBOT Soy Outlook on Friday: Up 1-2 cents; follow overnight, position evening

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's day session with modest gains, finding support from end-of-week position evening following Thursday's price declines.

 

CBOT soybean futures are seen starting 1 to 2 cents higher. In overnight trade, Nov soybeans were 1 3/4 cents higher at US$9.84 3/4.

 

The market may follow the overnight theme as traders square some positions, but there is potential for two-sided trade as the market's upside momentum has seemingly stalled, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Commodity negative influences from outside financial markets, and open opportunities for active harvesting in the Midwest for the 5-days are bearish features that will weigh on the market, he added.

 

In early trade, the U.S. dollar is higher, crude oil, metals and the stock market are posting losses.

 

Lingering reports of China preparing to release soybean supplies from its reserves is seen applying some underlying pressure to prices. Nevertheless, solid weekly export demand remains a supportive feature that may lead to mixed action during the session.

 

A technical analyst said first resistance for November soybeans is seen at US$10.00 and then at this week's high of US$10.12 1/4. First support is seen at Thursday's low of US$9.71 and then at US$9.60.

 

The U.S. Department of Agriculture reported total weekly soybean export sales for the 2009-10 marketing year were a net 654,500 metric tonnes for the week ended Oct. 8. The primary buyer was China with 184,000 tonnes. Analysts had forecast sales between 400,000 and 600,000 metric tonnes.

 

Soymeal sales were a net 466,200 tonnes. Trade estimates ranged from 75,000 to 200,000 tonnes. Soyoil commitments were 24,000 metric tonnes. Analysts had forecast sales between 10,000 and 30,000 tonnes.

 

The DTN Meteorlogix weather forecast said drier, warmer weather during the weekend and at least Monday and possibly Tuesday of next week should improve conditions for maturing crops and for field work in the U.S. Midwest. Cooler, wetter weather should redevelop after that which would again slow field work.

 

In the Delta, drier weather looks to continue during the next 4-5 days before rain redevelops. Temperatures will be very cool at first and warmer later, Meteorlogix said.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled little changed Friday as traders were cautious amid policy uncertainties. The benchmark May 2010 soybean contract settled RMB1 lower at RMB3,700 a metric tonne.

 

Cash soybean prices in China's major producing areas were higher in the week ended Friday, as farmers were reluctant to sell after the government promised to continue purchasing the crop this year.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 3.2% higher Friday on short covering and light buying, recouping most of the previous day's losses amid broad gains in crude and soyoil, said market participants. The January contract finished MYR67 higher at MYR2,178 a metric tonne.