November 6, 2009

 

CBOT Soy Outlook on Friday: Seen 2-3 cents lower on bearish economic data

 

 

Chicago Board of Trade soybean futures are expected drift lower in early day session trading Friday, as macro markets weigh on futures amid the release of bearish economic data.

 

CBOT soybean futures are seen starting 2 to 3 cents lower. In overnight trading, November soybeans were 1/2 cent higher at US$9.67 1/2, and January soybeans were 1/4 cent higher at US$9.72 1/4.

 

The outside financial markets have turned the commodity negative following the release of U.S. unemployment data, and that will pressure futures, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The U.S. unemployment rate climbed to 10.2% in October, its highest rate since April 1983. After the release of the data, the U.S. dollar bounced and crude oil, metals and equity futures all slumped.

 

Additional pressure is expected from U.S. harvest pressure, good planting weather in Brazil and signs that technicals are starting to break down on daily technical charts, Roose said.

 

A technical analyst said January soybean prices are now near the bottom of the recent trading range bound by support at the last reaction low of US$9.62 and by the October high of US$10.29 1/4. First resistance for January soybeans is seen at US$9.80 and then at US$9.90. First support is seen at Thursday's low of US$9.71 and then at US$9.62.

 

Meanwhile, "supportive export demand will soften the blow of economic woes, as China continues to be a standout buyer of U.S. soybeans, as evidenced by a fresh sales announcement today," said Victor Lespinasse, an analyst with Grainanalyst.com.

 

The U.S. Department of Agriculture announced Friday the private export sales of 356,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

The DTN Meteorlogix forecast said dry and mainly warm weather in the U.S. Midwest will favor crop harvests for at least the next five to seven days, or possibly longer. In the Delta, it does not appear likely that moisture associated with tropical depression Ida will reach into this region early next week, but it still does bear watching, Meteorlogix said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Friday as the market waited for the USDA's supply and demand report to be released. The benchmark September 2010 soybean contract settled RMB10 a metric tonne lower at RMB3,717/tonne.

 

China's cash market soybean prices in major producing areas were higher in the week to Friday, as farmers were reluctant to sell in expectations of higher prices.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Friday, with prices giving up most of their gains on intraday long liquidation, said trade participants. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR1 lower at MYR2,246 a metric tonne.