December 24, 2009

 

CBOT Soy Outlook on Thursday: Flat up 2 cents; strong exports, dollar weakness

 

 

Soybean futures on the Chicago Board of Trade are poised to post modest gains at the start of Thursday's day session, underpinned by solid export demand and weakness in the U.S. dollar.

 

CBOT soybean futures are seen starting steady to 2 cents higher. In overnight trade, January soybeans were 1/4 cent lower at US$10.01, and March soybeans were 1/4 cent lower at US$10.08 3/4.

 

Larger-than-expected weekly export sales, trader ideas the market remains oversold following a recent price slide and declines in the U.S. dollar is seen providing a firmer tone to prices, said Jason Roose, analyst with U.S. Commodities.

 

Adverse weather across the central U.S. will slow grain movement, boosting cash basis levels and may provide some support to futures as well, Roose said.

 

However, traders will take a cautious approach to activity, with volume expected to remain thin in an abbreviated pre-holiday trading session. The outside market will influence price action, with favorable South American crop conditions and outlooks for record output from Brazil and Argentina keeping a lid on upside potential.

 

A technical analyst said first resistance for March soybeans is seen at US$10.18 and then at this week's high of US$10.27 3/4. First support is seen at US$10.00 and then at this week's low of US$9.92 1/4.

 

The DTN Meteorlogix weather forecast said major crop areas in southern Brazil will see increasing coverage of showers and thunderstorms during the next 3-5 days, maintaining favorable conditions for crops. Northern crop areas look drier and hotter for awhile, but should eventually get back into some rain.

 

In Argentina, periodic scattered shower and thunderstorm activity will maintain favorable growing conditions most summer crops.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,369,100 metric tonnes for the week ended Dec 17. Sales of 1,195,600 were sold for delivery in the 2009-10 marketing year, with the primary buyer China with 633,300 tonnes. Analysts had forecast sales between 950,000 and 1,250,000 metric tonnes.

 

USDA reported 893,100 metric tonnes were shipped in the week ended Dec. 17, down 46% from the previous week and 52% from the prior 4-week average. The primary destinations were China with 457,900 metric tonnes.

 

Soymeal sales were a net 254,200 tonnes. Trade estimates ranged from 175,000 to 300,000 tonnes. Soyoil commitments were 46,700 metric tonnes. Analysts had forecast sales between 15,000 and 25,000 tonnes.

 

CBOT markets will have a holiday shortened trading week, with markets closing at 1 p.m. EST Thursday, and remaining closed Friday in observance of the Christmas Day holiday.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled higher Thursday, showing signs of stabilizing after their CBOT counterparts rose above US$10 a bushel Wednesday. The September 2010 soybean contract settled RMB24 higher at RMB3,953 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday, snapping a three-day decline as traders covered short positions in reaction to rising crude oil prices. The March contract on the Bursa Malaysia Derivatives ended MYR54, or 2.2%, higher at MYR2,554 a tonne.