December 4, 2009

 

CBOT Soy Outlook on Friday: Seen up with overnight, demand supports

 

 

Chicago Board of Trade soybean futures are expected to start Friday's day session with modest gains, buoyed by demand and a supportive theme in overnight trade.

 

CBOT soybean futures are seen starting 2 to 4 cents higher. In overnight trade, Jan soybeans were 2 1/2 cents higher at US$10.49 1/2, and March soybeans were 2 1/4 cents higher at US$10.56 3/4.

 

The market continues to garner support from strong world soybean demand, said Brian Hoops, president Midwest Market Solutions in a market note.

 

Market participants still see value in the soybean market, with demand the underpinning factor keeping sellers in a cautious mood, traders said.

 

The U.S. Department of Agriculture announced Friday private export sales of 232,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

The absence of any other fresh fundamental news will allow outside markets to influence prices. The U.S. dollar index is higher, crude oil futures and equities are up, while precious metals are lower.

 

The mixed signals from the outside markets are not providing clear directives for futures, but traders will keep an eye on the financial markets for clues to speculative fund activity after the U.S. Labor Department announced the U.S. unemployment rate dropped in November.

 

However, bullish traders have been disappointed that the amount of speculative money flowing into the market has not materialized as many had expected this month.

 

A technical analyst said first resistance for January soybeans is seen at Thursday's high of US$10.50 3/4 and then at US$10.60. First support is seen at US$10.40 and then at this week's low of US$10.32 1/4.

 

December soyoil deliveries totaled 682 lots. The house account at Tenco issued and stopped 32 and 33 lots, respectively. Customer accounts at Man Professional Clearing issued and stopped 451 and 454 lots, respectively. The last trade date assigned was Dec. 3.

 

In overseas markets, soybean futures rose on the Dalian Commodity Exchange Friday, tracking stronger demand on the Chicago Board of Trade. The benchmark May soybean contract settled 0.7% up at RMB4,014 a metric tonne.

 

Cash soybean prices in China's major producing areas stayed flat in the week to Friday, stabilizing since the government's announcement last week of a purchase policy that was in line with market expectations.

 

Crude palm oil futures on Malaysia's derivatives exchange ended at a six-month high following a bullish price outlook by analysts, likely lower palm oil output in Malaysia and a strengthening El Nino that may result in lower production, trade participants said Friday. The February contract on the Bursa Malaysia Derivatives exchange ended MYR84 higher at MYR2,562 a metric tonne.