December 11, 2009

 

CBOT Soy Outlook on Friday: Seen up; following the overnight theme

 

 

Soybean futures at the Chicago Board of Trade are poised to begin Friday's day session on firm footing, feeding off the bullish tone in overnight action.

 

CBOT soybean futures are seen starting 8 to 10 cents higher. In overnight trade, January soybeans were 10 1/2 cents higher at US$10.37 1/2, and March soybeans were 9 3/4 cents higher at US$10.45 1/2.

 

The market is seen mounting a recovery following days of lower trending prices, according to a market note from AgResource Co.

 

Supportive outside influences with firmer crude oil and metal futures coupled with weakness in the U.S. dollar providing some underpinning strength. The advances are seen technical in nature, as the market continues to find support beneath the market, reflective of Thursday's recovery from session lows down the stretch.

 

Meanwhile, strong world soybean demand remains a bullish feature limiting downside risks. The U.S. remains the primary source for global soybean supplies until South American production is available in February and March, a CBOT floor analyst said.

 

A technical analyst said first resistance for January soybeans is seen at Thursday's high of US$10.33 1/2 and then at US$10.40. First support is seen at Thursday's low of US$10.19 and then at US$10.10.

 

The DTN Meteorlogix weather forecast said episodes of scattered to widely scattered showers and seasonal to below normal temperatures will favor developing crops in Argentina during the next 5 days.

 

In Brazil, a new round of heavy rain appears likely through Saturday. Delays to field work are likely in Rio Grande Do Sul for soybean planting in areas that are already too wet. In general this is a favorable weather pattern for soybeans from Parana northward, Meteorlogix said.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Friday, in a correction of sharp declines in the previous two sessions, but further gains could be limited with imports up in November and likely to rise further. The benchmark September 2010 soybean contract settled RMB13 a metric tonne higher at RMB4,009/tonne.

 

Cash soybean prices in China's major producing areas were higher in the week ended Friday, as crushers were active in purchases while many farmers were reluctant to sell.

 

China's soybean imports in November fell 13% on year to 2.89 million metric tonnes, the General Administration of Customs said Friday. In the January-November period, soybean imports rose 11% to 37.77 million tonnes.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday in cautious, range bound trade, said trade participants. The benchmark February contract on Bursa Malaysia Derivatives ended MYR9 higher at MYR2,530 a metric tonne.