December 12, 2008
CBOT Soy Outlook on Friday: Down 20-25 cents; stumble on weak outside markets
Soybean futures on the Chicago Board of Trade are expected to start Friday's day session on the defensive, retreating from Thursday's advances amid bearish economic signals from outside markets.
CBOT soybean futures are called 20 cents to 25 cents lower.
In overnight electronic trading, January soybeans ended 21 1/2 cents lower at US$8.35. January soymeal was US$6.30 lower at US$250.00 per short tonne, while December soyoil ended 87 points lower at 30.85 cents per pound.
Macro economic factors are seen as the driver of prices again, with lower crude oil and stumbling stock index futures expected to keep buyers hands in their pockets, a CBOT floor analyst said.
Ideas that Thursday's advances were overdone in the absence of fresh supportive fundamental news is seen weighing on prices, as traders continue to take a cautious approach to market activity in the face of economic uncertainty.
However, solid underlying export demand remains a feature to limit downside pressure, a CBOT floor broker added.
The U.S. Department of Agriculture announced Friday private export sales of 116,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above psychological resistance at US$9.00 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$8.00 a bushel.
First resistance for January soybeans is seen at Thursday's high of US$8.65 3/4 and then at US$8.75. First support is seen at US$8.50 and then at US$8.42.
The DTN Meteorlogix said Argentina's major corn/soybean areas look to remain drier and warmer than normal during the next 10 days, reducing available soil moisture for these crops.
In Brazil, showers through the northern growing region will favor developing crops, especially as temperatures cool to more normal levels. Drier weather is seen through southern areas.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled slightly higher, tracking a rise at CBOT Thursday. The benchmark May 2009 soybean contract settled RMB6, or 0.2%, higher at RMB3,021 a metric tonne.
Cash soybean prices in China's biggest producing areas were sharply lower in the week to Friday, despite purchases from the government, as falling global prices made domestic grades much less competitive.
Meanwhile, China is expected to import 2.93 million metric tonnes of soybeans in December, according to an initial estimate issued Friday by the Ministry of Commerce. This is 9% more than the estimate of imports for November, which was issued last month.
Crude palm oil futures on Malaysia's derivatives exchange fell by as much as 4.7% Friday on record-high inventories, slumping crude oil prices and projections of slower growth in exports, trade participants said. The benchmark February contract on the Bursa Malaysia Derivatives ended MYR63 lower at MYR1,581 a metric tonne.