August 1, 2008

 

CBOT Soy Outlook on Friday: Lower on weather, outside influences

 

 

Soybean futures on the Chicago Board of Trade are expected to start Friday's day session on the defensive, with weakness in outside markets and the lack of a prolonged weather threat attracting sellers.

 

CBOT soybean futures are called 8 to 10 cents lower.

 

In overnight electronic trading, August soybeans were 5 3/4 cents lower at US$13.90 and November soybeans were 10 cents lower at US$13.94. December soyoil was 83 points lower at 58.67 cents per pound and December soymeal was US$1.50 lower at US$374.00 per short tonne.

 

Forecasts for stressful heat to only linger in the U.S. corn belt for a couple of days coupled with beneficial rains and cooler temperatures returning to the region next week takes some edge off prices, analysts said.

 

Weakness in energies, metals and Asian markets are casting a bearish theme on prices as well, with speculative traders expected to trim some length from the market, analysts added.

 

However, two-sided action maybe in store, as futures continue to hover in a sideways pattern, with the uncertainties of yield, output and acreage continuing to underpin prices, while favorable crop conditions attract profit-taking on rallies, a CBOT floor analyst said.

 

A technical analyst said a bullish weekly high close on Friday would provide market bulls with fresh upside technical momentum. The next upside price objective for November soybeans is to push and close prices above solid technical resistance at US$14.50 a bushel. The next downside price objective is pushing and closing prices below solid technical support at this week's low of US$13.51.

 

First resistance for November soybeans is seen at Thursday's high of US$14.17 and then at this week's high of US$14.21. First support is seen at Thursday's low of US$13.87 and then at US$13.70.

 

The DTN Meteorlogix weather forecast continues to favor beneficial weather for flowering soybeans with no persistent hot or dry weather indicated. A brief period of temperatures reaching the middle 90s Fahrenheit is possible over the weekend or early next week before scattered showers and thunderstorms and cooler temperatures return.

 

In the U.S. Delta, temperatures above to much above normal combined with below normal rainfall will continue to stress developing soybeans during the next seven days, although there was some significant rainfall in central and northern Mississippi during the past 24 hours, Meteorlogix reports.

 

In deliveries, August soybean deliveries totaled 145 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was June 16.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled sharply lower Friday on supply pressure and a weak sentiment. The benchmark January 2009 contract settled RMB145 lower at RMB4,402 a metric tonne.

 

Soybean prices in China's major producing regions were lower in the week to Friday, tracking a tumble in futures on the Dalian Commodity Exchange over the same period.

 

Chinese importers booked one to two cargoes of soybeans this week, commodity consultancy firm Shanghai JCI said Friday. The soybeans, from Argentina, are to be delivered in September, the firm said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 3.3% lower Friday, at a fresh closing low for this year, on pre-weekend profit-taking and spillover from weak crude and soyoil, trade participants said. The benchmark October contract on Bursa Malaysia Derivatives ended MYR100 lower, at MYR2,950 a metric tonne.