October 19, 2007

 

CBOT Soy Outlook on Friday: Seen mixed; looking for direction

 

 

Chicago Board of Trade soybean futures are seen starting Friday's session with a mixed undertone, as the market looks for direction with supportive outside influences remaining an underpinning feature.

 

In overnight e-CBOT trading, November soybeans were 1 1/4 cents lower at US$9.90 1/4 per bushel, and January soybeans were 1 3/4 cents lower at US$10.08 1/2.

 

A quiet news front will once again keep traders watching outside markets, with end of the week consolidative trade seen limiting advances, analysts said.

 

Inflationary concerns with continued weakness in the U.S. dollar are expected to attract speculative money into commodities once again. However, with futures rallying on these issues throughout the week and a lack of fresh fundamental news, the extension of the gains seems limited with producer and commercial selling expected as the November contract nears the US$10.00 level, a CBOT floor analyst said.

 

A technical analyst said price action Thursday could have been the beginning of an upside breakout from a bull flag pattern that has formed on the daily bar chart. The next upside price objective for November soybeans is to push and close prices above major psychological resistance at US$10.00. The next downside price objective is closing prices below solid support at this week's low of US$9.68.

 

First resistance for November soybeans is seen at Thursday's high of US$9.96 1/4 and then at US$10.00. First support is seen at Thursday's low of US$9.82 and then at US$9.75.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western US Midwest Friday and Saturday. Chances for showers redevelop in the region Sunday. Temperatures will average above normal. In the eastern Midwest, Breezy with a few light showers in the north today, dry elsewhere in the region. Mainly dry during the weekend. Temperatures average above normal during this period.

 

In Brazil, isolated to widely scattered thundershowers are possible through the weekend. Heavier and more widespread rain may redevelop next week.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Friday on gains at the Chicago Board of Trade overnight and strong soyoil prices. The benchmark May 2008 soybean contract settled RMB53 higher at RMB4,275 a metric tonne.

 

China's cash soybean prices continued to rise in the week ended Friday due to large amount of demand, despite the increased supply in the harvest season.

 

Crude palm oil futures on Malaysia's derivatives exchange ended at a record high Friday buoyed by speculative buying amid strong prices of crude oil and soyoil, market participants said. The benchmark January CPO contract on Bursa Malaysia Derivatives ended MYR30 higher at MYR2,765 a metric tonne, after touching an all time high of MYR2,795/tonne.