November 14, 2008
CBOT Soy Outlook on Friday: Mixed; outsides eyed in cautious trade
Chicago Board of Trade soybean futures are seen starting Friday's day session with a mixed undertone, looking for direction as traders continue to eye outside markets for near term guidance.
CBOT soybean futures are called 2 cents higher to 2 cents lower.
In overnight electronic trading, November soybeans ended 2 1/4 cents higher at US$8.89 1/4 cents per bushel. January beans shed 2 cents to US$8.92. December soymeal were US$0.10 higher at US$264.10 per short tonne, while December soyoil fell 6 points to 32.75 cents per pound.
The market is still not trading on its own fundamentals, and with uncertainty lingering in global economies, traders are expected to take a cautious approach to activity heading into the weekend, said Don Roose, president U.S. Commodities in West Des Moines Iowa.
Two-sided trade is the theme analysts are pointing to in early action, with the inability of futures to gain upside momentum overnight following a late rally in the stock market Thursday is seen as a caution sign to traders.
"Subpar weekly export sales is an indication of slowing demand amid a firmer U.S. dollar, and despite an above expectation October crush figure," the crush was 10 million below the average for the month in recent years, Roose said.
However, concerns about dryness in Argentina should provide some support, Roose 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 the October low of US$8.38 1/2.
First resistance for January soybeans is seen at US$9.00 and then at Thursday's high of US$9.12 1/2. First support is seen at Thursday's low of US$8.72 3/4 and then at US$8.50.
U.S. Department of Agriculture reported total weekly soybean export sales were a net 478,300 metric tonnes for the week ended November 6, down 53 percent from the prior 4-week average. Analysts had forecast sales between 500,000 and 800,000 metric tonnes. The primary buyers were China with 207,800 metric tonnes and Mexico with 82,000 tonnes. Soymeal sales were a net 124,400 tonnes, at the high end of trade estimates ranging from 75,000 to 125,000 tonnes. Soyoil commitments were a net 6,300 metric tonnes. Analysts had forecast sales between zero and 10,000 tonnes.
The National Oilseed Processors Association says 143.397 million bushels of soybeans were crushed in October, up from 120.376 million in September and above the average analyst estimate of 140.9 million. The range of pre-report estimates was 134.6 million to 147 million. Soyoil stocks were pegged at 1.984 billion pounds, down from 1.988 billion, and below the average analyst estimate of 2.022 billion. The range of estimates was 1.943 billion pounds to 2.188 billion pounds.
A total of 275 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 stopped 52 lots. The last trade assigned was November 13.
Friday is the last trading day for November soybeans, with the contract expiring at 1:00 p.m. EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Friday, along with a surge in domestic and global stock markets. China's benchmark May 2009 soybean contract settled RMB34 higher at RMB3,236 a metric tonne.
Cash soybean prices in China's major producing areas were lower in the week to Friday, as traders looked to purchase imported soybeans to take advantage of falling global prices.
Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, shedding early gains as investors scouted for fresh leads amid volatile trading. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR25 lower at MYR1,455 a metric tonne.