August 29, 2008

 

CBOT Soy Outlook on Friday: Up, overnight theme, outside markets, weather

 

 

Chicago Board of Trade soybean futures are seen starting Friday's day session higher, in step with the overnight theme, with supportive outside influences and crop uncertainties underpinning prices.

 

CBOT soybean futures are called 3 to 5 cents higher.

 

In overnight electronic trading, September soybeans were 3 1/2 cents higher at US$13.36 and November soybeans were 4 3/4 cents higher at US$13.28 3/4. December soyoil was 32 points higher at 54.40 cents per pound and December soymeal was US$1.30 lower at US$357.50 per short tonne.

 

A weaker U.S. dollar index coupled with firmer crude oil prices is expected to attract speculative buying, with the sensitivity of the soybean market to weather heading into an extended holiday weekend supporting prices, said Vic Lespinasse, analyst with grainsanalyst.com.

 

The U.S. soy crops needs additional rains to finish filling pods and with a drier outlook through the weekend, uncertainty still surrounds yield potential.

 

End-of-the-month position squaring is seen promoting some sideways action, with traders taking a cautious approach ahead of the weekend. Traders will keep a close eye on the path of Tropical Storm Gustav, as what maybe bullish for crude oil futures today could be bearish for soybeans next week if Gustav becomes a hurricane and pushes rain into the Midwest next week, Lespinasse added.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at this week's high of US$13.74 1/2 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$13.00.

 

First resistance for November soybeans is seen at Thursday's high of US$13.49 and then at US$13.74 1/2. First support is seen at Thursday's low of US$13.07 and then at of US$13.00.

 

The DTN Meteorlogix weather forecast said rains through the western and north-central Midwest will help maintain or improve prospects for filling crops, especially for soybeans. Dryness remains a concern to the east and south, Meteorlogix reports. However, there is no significant cold weather expected for the Midwest region during the next 7 days, but somewhat cooler conditions are seen during the last part of the 10 day forecast, mostly in the west and north.

 

In deliveries, September soybean deliveries totaled 162 lots. A customer account at Eagle Market issued 159 lots, with a customer account at JP Morgan the primary stopper of 120 lots. The last trade date assigned was July 22.

 

Meanwhile, U.S. soybean exports to Southeast Asia are estimated to have fallen 37.5% in the marketing year ending Aug. 31, John Lindblom, regional director of the American Soybean Association, said Friday.

 

"High prices of food-grade soybeans had led to a drop of around 300,000-400,000 metric tonnes of exports to Indonesia, which weighed heavily on overall exports to the region," he added.

 

However, he said the U.S. was able to increase its soymeal exports to the region, with total exports expected to rise to 800,000 tonnes in the soymeal marketing year that will end Oct. 31, from 500,000 tonnes in 2006-07.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled mixed Friday tracking a fall in crude oil prices and on CBOT Thursday. The benchmark January 2009 soybean contract settled RMB8 lower at RMB4,263 a metric tonne, or down 0.2%.

 

Cash soybean prices in China's major producing areas were slightly higher in the week ended Friday as processing plants started to refill their stocks.

 

Chinese importers booked four to six cargoes of soybeans this week, commodity consultancy firm Shanghai JCI said Friday. These soybeans were bought from Argentina, the U.S. and Brazil, said Tu Xuan, an analyst at the firm.

 

Crude palm oil futures on Malaysia's derivatives exchange ended at their highest levels of the week Friday on expected gains in exports and short covering, trade participants said. The benchmark November contract on Bursa Malaysia Derivatives ended MYR150 higher, at the intraday high of MYR2,620/tonne.