November 20, 2009

 

CBOT Soy Outlook on Friday: Seen lower on profit taking, outside markets

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session with modest losses, pressured by weakness in outside markets and pre-weekend profit taking.

 

CBOT soybean futures are seen starting 2 to 3 cents lower. In overnight trade, Jan soybeans were 1 cent lower at US$10.38, and March soybeans were 1 cent lower at US$10.43 3/4.

 

A quiet news front have traders anticipating the market will follow the overnight theme, with a firmer U.S. dollar and weakness in crude oil and metal futures lending pressure to prices, analysts say.

 

Overbought technical signals open the door for selling pressure to emerge heading into the weekend, particularly with January soybeans up 52 cents on the week, a CBOT floor analyst said.

 

However, strong underlying export and domestic demand remain underpinning influences that attracts speculative buying on breaks. The speculative buying has enabled futures to cast aside pressure from a firmer dollar in recent sessions, increased supply movement in the cash market and improved planting and crop development weather in South America.

 

Traders remain on guard for choppy activity, with sellers cautious of fund buying remerging, a floor broker added.

 

A technical analyst said first resistance for January soybeans is seen at this week's high of US$10.49 and then at US$10.68. First support is seen at US$10.40 and then at the October high of US$10.29 1/4.

 

The T-storm Weather forecast said a few thunderstorms will affect eastern growing areas of Argentina on Friday and Saturday. Widespread thunderstorms return to Argentina Tuesday-Wednesday to re-improve soil moisture levels.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Friday, along with the rise on CBOT Thursday and rising soybean import costs. The benchmark September 2010 soybean contract settled RMB23 higher at RMB3,827 a metric tonne.

 

Cash soybean prices in China's major producing areas were mostly stable in the week ended Friday, supported by gains in futures markets.

 

Crude palm oil futures prices on Malaysia's derivatives exchange ended higher Friday, tracking exports, trade participants said. The benchmark February contract on the Bursa Malaysia Derivatives exchange ended MYR48 higher at MYR2,419 a metric tonne.