November 13, 2008
CBOT Soy Outlook on Thursday: Down 2-5 cents; eyeing outsides, quiet news front
Soybean futures on the Chicago Board of Trade are expected to open lower Thursday, continuing the overnight theme amid a quiet news front and mixed signals from outside markets.
CBOT soybean futures are called 2 to 5 cents lower.
In overnight electronic trading, November soybeans ended 7 3/4 cents lower at US$8.77 1/2 cents per bushel. January beans shed 2 3/4 cents to US$8.92 1/4. December soymeal dropped US$0.70 to US$265.70 per short tonne, while December soyoil fell 21 points to 32.37 cents per pound.
Futures will take their cue from outside markets in the absence of fresh news, said Jack Scoville, analyst with Price Futures Group in Chicago.
Traders continue to take a cautious approach to market activity amid recessionary fears, but solid underlying fundamentals are seen providing support on price breaks.
Good commercial interest beneath the market is seen as an underpinning feature and with outside markets more steady in early trade, downside movement may be limited, analysts said.
Otherwise, the trade will watch movements in crude oil, stocks and the U.S. dollar near the grain market opening for direction and this could push prices in either direction as traders look for some stability after the week's losses, Scoville added.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at this week's high of US$9.54 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$8.82 1/2.
First resistance for January soybeans is seen at US$9.00 and then at Wednesday's high of US$9.22 1/4. First support is seen at Wednesday's low of US$8.88 and then at US$8.82 1/2.
A total of 409 contracts were delivered against the CBOT November soybean futures contract. Issuers and stoppers were scattered among various commission houses while the house account at Term Commodities was the primary stopper of 171 lots. The last trade assigned was November 12.
U.S. Department of Agriculture's weekly export sales report normally released Thursday will be delayed until Friday at 8:30 a.m. EST because the federal government was closed Tuesday for the Veterans Day holiday.
In other news, Argentina's soymeal exports may rise to a record 29 million metric tonnes in the year ending September 2009, accounting for more than half of the global trade, according to the U.N. Food and Agriculture Organization.
Argentina is the world's largest soymeal exporter by volume. The country's imports of soybeans are also forecast to rise, as it is purchasing soybeans from neighboring countries to boost its soymeal shipments further, the FAO said in a recent report.
In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled down for the third consecutive session Wednesday, pressured by Wednesday's losses in CBOT soybean futures. The benchmark May 2009 soybean contract settled 62 yuan lower at RMB3,202 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange fell for a third straight day Thursday on a slump in crude oil prices but ended off lows on short-covering, said trade participants. The benchmark January contract on Bursa Malaysia Derivatives ended 59 ringgit lower at MYR1,480 a metric tonne.