December 4, 2008
CBOT Soy Outlook on Thursday: Lower on outside markets, lack of fresh support
Soybean futures on the Chicago Board of Trade are poised to open Thursday's day session on the defensive, pressured by bearish outside influences and a lack of fresh supportive news.
CBOT soybean futures are called 5 cents to 7 cents lower.
In overnight electronic trading, January soybeans ended 7 1/4 cents lower at US$8.22 3/4. January soymeal was US$0.60 lower at US$246.10 per short tonne, while December soyoil ended 28 points lower at 30.30 cents per pound.
Bearish market psychology is expected to keep futures trending lower, with lower crude oil and equity markets and a stronger U.S. dollar setting the stage for lower price action, analysts said.
Lower-than-expected weekly export sales, poor technical performance recently and global economic weakness are seen adding to the lower theme, analysts added.
A technical analyst said the next upside price objective for the bean bulls is to push and close prices above psychological resistance at US$9.00 a bushel. The next downside price objective for the bears is pushing and closing prices below psychological support at US$8.00 a bushel.
First resistance for January soybeans is seen at Wednesday's high of US$8.44 and then at US$8.50. First support is seen at Wednesday's low of US$8.19 1/4 and then at US$8.00.
The DTN Meteorlogix weather forecast said drier weather in Argentina during the next 5-7 days looks to deplete soil moisture for developing crops, after last week's beneficial rains.
Drier and somewhat warmer temperatures through southern Brazil's soybean areas will reduce available soil moisture for the early crop. Long-range maps suggest a chance for rain developing but this is highly uncertain, Meteorlogix reports.
The U.S. Department of Agriculture reported total weekly soybean export sales were a net 364,500 metric tonnes for the week ended Nov. 27. Sales for 2008/09 were a net 359,800 metric tonnes, a marketing year low. Analysts had forecast sales between 500,000 and 700,000 metric tonnes. The primary buyer was China with 298,000 metric tonnes. Soymeal sales were a net 108,000 tonnes, within trade estimates ranging from 70,000 to 100,000 tonnes. Soyoil commitments were a net 2,700 metric tonnes. Analysts had forecast sales between zero and 10,000 tonnes.
USDA announced Thursday private export sales of 1740,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.
The U.S. Census Bureau Thursday raised its October soyoil stocks estimate to 2.404 billion pounds, up from its preliminary estimate of 2.384 billion pounds, according to the Census Bureau's Fats and Oils stocks report.
December soyoil deliveries totaled 245 lots. A customer account at ADM Investor Services was the primary stopper of 237 lots. The last trade date assigned was Nov. 6.
In other news, the European Commission on Thursday approved a genetically modified soybean developed by Monsanto Co. (MON) for import into the European Union, a commission spokeswoman said. The soybean, Roundup Ready 2, was approved more quickly than almost any other genetically modified product in the E.U.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on falling freight fees and crude oil prices. The benchmark May 2009 soybean contract settled RMB84, or 2.7%, lower at RMB3,050/tonne.
Crude palm oil futures on Malaysia's derivatives exchange fell by as much as 5.1% Thursday and ended lower for the fifth successive day on strong selling pressure as investors took cues from bearish analysts' price outlooks and weak crude oil. The benchmark February contract on Bursa Malaysia Derivatives ended MYR74 lower at MYR1,462 a metric tonne, just off an intraday low of MYR1,457/tonne.