December 10, 2009

 

CBOT Soy Outlook on Thursday: Up 1-2 cents; USDA report doesn't surprise

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's day session with modest gains, following the overnight theme, with U.S. Department of Agriculture's supply and demand report failing to provide any surprises.

 

Mildly supportive outside market influences and solid weekly export sales data is seen underpinning prices initially, as the lack of any surprises for the market to react to from the USDA report keeps outside influences in play, analysts said.

 

"I'm going to derive the opening calls off of the [overnight] trade and export sales, because the overall report was neutral with trade expectations mostly met," said Mike Zuzolo, president Global Commodity Analytics and Consulting.

 

In early trade, the U.S. dollar index is lower, with crude and metal futures higher.

 

U.S. soybean ending stocks were pegged at 255 million bushels, down from the USDA's November estimate of 270 million, but above the average analyst estimate of 235 million bushels.

 

In the supply/demand balance sheet, the government raised its export estimate by 15 million bushels to 1.340 billion bushels while leaving the amount of soybeans it expects to be crushed unchanged at 1.695 billion bushels.

 

"Soybean exports are increased reflecting the record export pace in recent weeks and higher projected soybean imports by China, USDA said in the report. U.S. export commitments (shipments plus outstanding sales) were record high through November, up almost 60 percent from a year ago," USDA added.

 

Soybeans may get a little negative bias from the USDA not increasing the crush as many had anticipated, a CBOT floor trader said.

 

USDA reported total weekly soybean export sales were a net 920,100 metric tonnes for the week ended Dec 3. The primary buyer was China with 613,700 tonnes. Analysts had forecast sales between 600,000 and 900,000 metric tonnes.

 

USDA reported 2,067,300 metric tonnes were shipped in the week ended Dec. 3, up 59% from the previous week and 18% from the prior 4-week average. The primary destinations were China with 1,449,800 metric tonnes.

 

Soymeal sales were a net 304,200 tonnes. Trade estimates ranged from 100,000 to 175,000 tonnes. Soyoil commitments were 12,300 metric tonnes. Analysts had forecast sales between 5,000 and 50,000 tonnes.

 

A technical analyst said first resistance for January soybeans is seen at US$10.40 and then at Wednesday's high of US$10.51 1/2. First support is seen at Wednesday's low of US$10.21 1/2 and then at US$10.10.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, following Wednesday's fall at CBOT. The September 2010 soybean contract settled RMB74 a metric tonne lower at RMB3,996/tonne.

 

Meanwhile, higher global soybean prices and the Chinese government's soybean purchase subsidies will make local soybeans more attractive than their global counterparts in early 2010, the China National Grain and Oils Information Center said in a report Thursday.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower, but prices were off intraday lows as Malaysia's palm oil output was sharply lower, leading to better-than-expected inventory data, trade participants said. The February contract on the Bursa Malaysia Derivatives ended MYR5 lower at MYR2,521 a metric tonne.