September 25, 2008

 

CBOT Soy Outlook on Thuesday: Down, follow overnight, mixed outside signals

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's day session on the defensive, in tune with overnight price action amid a lack of fresh supportive influences.

 

CBOT soybean futures are called 8 to 10 cents lower.

 

In overnight electronic trading, November soybeans were 10 1/4 cents lower at US$11.76 3/4. December soyoil was 34 points lower at 47.86 cents per pound and December soymeal was US$4.30 lower at US$328.20 per short tonne.

 

Mixed signals from outside markets with crude oil and the U.S. dollar lower are not providing clear direction, but with bearish near term weather and the trade gearing up for the fall harvest, weakness is anticipated initially, said Vic Lespinasse, analyst with grainanalyst.com.

 

There remains some hesitancy among traders to take on added risk amid the volatile price movements that remains a threat in the face of uncertain economic times, analysts added.

 

Wide ranging yield reports from early harvests and solid weekly export sales may generate some underlying support, while an in-line with expectation crush report is seen as a non factor, a CBOT floor trader said.

 

A market technician said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at the last reaction high of US$12.22 1/2 a bushel. The next downside price objective is to push and close prices below solid technical support at the August low of US$11.68.

 

First resistance for November soybeans is seen at US$12.00 and then at this week's high of US$12.12. First support is seen at Wednesday's low of US$11.78 1/4 and then at the August

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 612,500 metric tonnes for the week ended Sept. 18. Analysts had forecast sales between 200,000 and 700,000 metric tonnes. The primary buyer was China with 465,000 tonnes.

 

Soymeal sales were a net 62,400 tonnes, near the low end of trade estimates ranging from 50,000 to 125,000 tonnes. Sales in 2007-'08 sales were 13,300 tonnes, a marketing year low. Soyoil commitments were a net 5,600 metric tonnes. Analysts had forecast sales between zero and 10,000 tonnes.

 

The U.S. Census Bureau pegged the August soybean crush at 128.7 million bushels, down from the July crush figure of 139.3 million bushels. In a survey of analysts, the average of estimates was 128 million bushels. August soymeal stocks were reported at 413,441 short tonnes, up from the 299,344 tonnes in July, and well below the average of estimates at 281,400 tonnes. Soyoil stocks came in at 2.589 billion pounds, down from July stocks of 2.780 billion, but in line with the average estimate of 2.587 billion pounds.

 

The DTN Meteorlogix weather forecast said there are no significant concerns for maturing crops or for any early harvests for at least another 5 to 7 days in the Midwest. After that there is some uncertainty as it concerns potential wet weather or potential cold weather.

 

In the Delta, drier, warmer weather during the next 5 days will favor soybean harvesting. It may turn somewhat cooler during the 6-to-10 day period, Meteorlogix added.

 

In other news, Indian exporters are likely to clinch deals for the shipment of 300,000 metric tonnes of soybean meal in the next two weeks and the total exports may reach an all-time high of 5.5 million tonnes in 2008-09, trading executives said Thursday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday, as traders were cautious ahead of a long holiday. The benchmark January, 2009 soybean contract settled RMB9 higher at RMB4,029 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 1.6% lower Thursday after palm oil exports were estimated down and also below expectations. The benchmark December contract on Bursa Malaysia Derivatives ended MYR38 lower at MYR2,280 a metric tonne.