November 6, 2008
CBOT Soy Outlook on Thursday: Uncertain on mixed signals
The outlook for soybean futures on the Chicago Board of Trade is mixed for Thursday, as satisfactory export sales and bullish crop estimates stand against crude oil and equities weakness and a stronger dollar. CBOT soybean futures are called mixed.
In overnight electronic trading, November soybeans added 3 3/4 cents to US$8.98 1/2 cents per bushel. January beans gained 4 1/2 cents to US$9.08 1/2. December soymeal rose 5 cents to US$265.30 per short tonne, while December soyoil added 5 points at 34.07 cents per pound.
Though Wednesday's soybean retreat "is not a good indication of strength" considering it lost in a day what it took about a week to gain, soybean seem to have found a comfortable trading range between US$8.75 and US$10.
And, while macroeconomic forces will continue to weigh on the soy complex, underlying world protein demand still provides support, the trader adds.
A Dow Jones Newswires survey of 18 analysts found average soybean production estimates to rest at 2.916 billion bushels, below the U.S. Department of Agriculture's current forecast of 2.938 billion bushels. The analyst's average soybean yield was 39.2 bushels per acre, below the USDA's 39.5. Analysts, on average, pegged new crop carryout at 189 million bushels, compared to the USDA's current estimate of 205 million bushels.
The USDA is scheduled to release updated estimates Monday at 8:30 a.m. EST.
Soybean export old and new crop sales totaled 896.1 thousand metric tonnes for the week ended Oct. 30, according to figures released Thursday by the USDA.
Analysts expected to see sales range from 600,000-1 million metric tonnes. A total of 14 contracts were delivered against the CBOT November soybean futures contract. A customer account at Rand issued 14 lots, with a customers accounts at Man Pro Clearing and R.J. O'Brien, stopping 8 and 6 lots, respectively. The last trade assigned was Oct. 27.
To wrest technical control of January soybean futures after the bears gained "fresh downside momentum Wednesday," bulls must first close above the US$9.55 1/2 solid technical resistance, a market technician said, marking first resistance at US$9.25.
The soybean bears' next target is closing January soybeans below solid technical resistance at October's low of US$8.38 1/2, he said, pegging first support at US$9.
Rain and thundershowers is expected to develop in the central Midwest Thursday and move to the east Friday, according to DTN Meteorlogix.
Light, scattered showers or flurries could develop in the Midwest beginning Friday and through the weekend, the private forecasting firm said.
Temperatures through Friday should range from 35-77 degrees Fahrenheit, with harvest weather deteriorating during the next several during, DTN said.
In global trading news, Brazil's Census Bureau, or IBGE, on Thursday put the 2008-09 soy crop at 59.8 million metric tonnes. Planted acreage should increase 0.6% to 21.4 million hectares in 2008-09.
The National Commodities Supply Corp., or Conab, on Thursday estimated Brazilian soy farmers to produce between 58.3 million tonnes and 59.3 million tonnes. Conab's acreage estimates are pegged from down down 1.2% to up 0.4%. Private consultancy Celeres pegs the crop at around 61.6 million tonnes.
Conab said that Mato Grosso has been especially hard hit by rising costs, a lack of credit and lower prices. As a result, Mato Grosso's planted area is expected to fall at least 3% to between 5.5 million hectares and 5.61 million hectares in 2008-09 compared to 5.67 million hectares 2007-08.
More rain would aid the environment for planting and developing soybeans through northern Mato Grosso, while weather is "generally favorable" through Parana and "drier weather would benefit fieldwork in Rio Grande do Sul," DTN said.
Meanwhile, in Argentina, "beneficial rains" are "at times" improving soil moisture conditions for crop planting, the forecasters add.
Soybean futures traded on China's Dalian Commodity Exchange settled sharply lower Thursday, along with the fall on the Chicago Board of Trade overnight.
The benchmark May 2009 soybean contract settled RMB112 lower at RMB3,249/tonne, or down 3.3%.
Front-month contracts were somewhat supported by the government's purchase of cash soybeans in major producing areas, while the late-month contracts were weaker on expectations of sluggish market demand.
Crude palm oil futures on Malaysia's derivatives exchange fell as much as 5.6% Thursday on liquidation of long positions amid weaker crude oil and soyoil prices, but ended off lows on speculative buying, said trade participants.
The benchmark January contract on Bursa Malaysia Derivatives ended down MYR41 at MYR1,599 a metric tonne, off an intraday low of MYR1,548.
The United Nations Food and Agriculture Organization Thursday said palm oil exports from Malaysia and Indonesia are likely to rise 1.4 million tonnes, or 5%, in the marketing year ending September 2009.
Palm oil is likely to dominate global trade in vegetable oils, including oils contained in exported seeds, with a lion's share of over 40% this year, FAO said.