December 18, 2009

 

CBOT Soy Outlook on Friday: Up in modest rebound; more China demand

 

 

Chicago Board of Trade soybeans are poised to open slightly higher Friday in a rebound from Thursday's sharp drop as outside markets stabilize.

 

Soybeans are called 3 to 5 cents higher. In overnight trade, January soybeans were up 4 1/4 cents to US$10.26 1/4 per bushel and March soybeans were up 4 1/2 cents to US$10.34 1/2.

 

January soyoil was up 45 points to 39.09 cents per pound and January soymeal was up US$1.10 to US$308.50 per short tonne.

 

Traders said the market could see a modest bounce following Thursday's 35-cent drop. A stronger dollar weighed on soybeans and other commodities Thursday and did not appear to be as much of a factor Friday, traders said.

 

MF Global Vice President for Research Rich Feltes said in a commentary that there were other reasons for Thursday's slide, including weakening basis and improved South American growing weather, but that ultimately the dollar was the key reason.

 

The market dipped to its lowest level since Nov. 17 on Thursday before rebounding slightly. That Nov. 17 low of US$10.03 in the January contract serves as the next support level, an analyst said.

 

The market continues to enjoy robust demand from China.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of Soybeans for delivery to China during the 2010/2011 marketing year, the USDA said Friday.

 

It is the third announcement of U.S. soybean sales to China this week.

 

Bulls still have the slight overall near-term technical advantage, a technical analyst said. The next upside technical objective for the bulls is pushing and closing January prices above solid technical resistance at the December high of US$10.78 1/2 a bushel. The next downside price objective for the bears is pushing and closing prices below major psychological support at US$10.00 a bushel.

 

First resistance for January soybeans is seen at US$10.30 and then at US$10.40, the technical analyst said. First support is seen at Thursday's low of US$10.15 1/2 and then at US$10.00.

 

The trade will be awaiting a private firm's production and 2010 acreage estimates Friday, which are expected to be released around 10:30 a.m.

 

China's soybean futures traded on the Dalian Commodity Exchange settled lower Friday, weighed down by a strong dollar and tracking the overall fall in outside markets.

 

The benchmark September 2010 soybean contract settled RMB84, or 2.1%, lower at RMB3,954 a metric tonne.

 

The Malaysian palm oil market was closed due to a public holiday.