November 19, 2009

 

CBOT Soy Outlook on Tuesday: Down 6-8 cents on outside markets, but exports support

 

 

Soybean futures at the Chicago Board of Trade are poised for a lower start to Thursday's day session, taking its cue from the overnight theme and bearish outside market signals.

 

CBOT soybean futures are seen starting 6 cents to 8 cents lower. In overnight trade, January soybeans were 7 1/2 cents lower at US$10.19 1/2, and March soybeans were 6 3/4 cents lower at US$10.26 1/2.

 

Weak overnight prices in conjunction with a firmer U.S. dollar and broad-based declines across the commodity sector have traders anticipating lower price action in the absence of enough fresh bullish news to underpin prices, said Victor Lespinasse, analyst with Grainanalyst.com.

 

Follow through selling from Wednesday's weak technical close and traders booking profits from recent gains ahead of next week's holiday shortened trading week is seen aiding the defensive tone. Improved planting and crop development weather in Argentina is another bearish factor adding to the defensive theme.

 

However, strong export demand as evidenced by higher-than-expected weekly sales and shipments are supportive features expected to limit declines, Lespinasse added.

 

A technical analyst said first resistance for January soybeans is seen at US$10.40 and then at Wednesday's high of US$10.49. First support is seen at Wednesday's low of US$10.23 1/2 and then at US$10.11 3/4.

 

The soy products are expected to start lower in unison with soybeans, but strong weekly export sales for soymeal is expected to allow meal to gain some product share value on spreads.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,349,700 metric tonnes for the week ended Nov. 12. The primary buyer was China with 724,700 tonnes. Analysts had forecast sales between 700,000 and 1,000,000 metric tonnes.

 

USDA reported a marketing year high 1,724,200 metric tonnes were shipped in the week ended Nov. 5, with China the primary destination for 914,500 tonnes.

 

Soymeal sales were a net 367,800 tonnes. Trade estimates ranged from 100,000 to 225,000 tonnes. Soyoil commitments were 12,800 metric tonnes. Analysts had forecast sales between 5,000 and 20,000 tonnes.

 

USDA also announced private exporters reported the sale of 116,000 metric tonnes of soybeans for delivery to China during the 2009/2010 marketing year, the USDA said Thursday.

 

The T-storm Weather forecast said another round of heavy thunderstorms expectedly improved soil moisture in drier areas of Argentina overnight. More substantial thunderstorm clusters will improve soil moisture across Argentina over the next week.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled marginally higher Thursday, led by slightly greater gains soyoil and soymeal prices due to local inflation expectations and cues from technical charts. The benchmark September 2010 soybean contract settled RMB5 a metric tonne higher at RMB3,804/tonne.

 

Crude palm oil futures prices on Malaysia's derivatives exchange ended lower Thursday in cautious range bound trade. The February contract ended MYR29 lower at MR2,371 a metric tonne.