October 3, 2008
 
CBOT Soy Outlook on Friday: Lower, follow-through, seasonal pressure

 

 
Soybean futures on the Chicago Board of Trade are seen lower to start Friday's day session on follow-through speculative sales and seasonal pressure.

 

CBOT soybean futures are called 2-to-4 cents lower.

 

In overnight electronic trading, November soybeans were 4 1/2 cents lower at US$9.99 1/2. December soyoil was 9 points lower at 43.09 cents per pound and December soymeal was US$2.70 lower at US$271.80 per short tonne.

 

Carryover liquidation is poised to weigh on prices initially, with outlooks for an aggressive harvest weekend adding some seasonal hedge pressure as well, said Don Roose of U.S. Commodities in West Des Moines, Iowa.

 

Weather forecasts are non-threatening to late developing crops and harvest operations, but technically oversold market conditions are expected to limit losses and boost prices on any sign of exhausted speculative selling, particularly with corn and wheat edging higher, Roose added.

 

A quiet news front and mixed signals from outside markets are not providing any definitive clues to price direction, analysts said.

 

The confidence level of many traders is shaken by uncertain global economic outlooks, with many participants sidelined awaiting news of Friday's U.S. House of Representative's vote on the proposed US$700 billion credit rescue bill.

 

A technical analyst said the market is now short-term oversold and due for an upside corrective bounce very soon. The next upside price objective for November soybeans is to push and close prices above solid technical resistance at the April low of US$10.45 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.50.

 

First resistance for November soybeans is seen at US$10.25 and then at US$10.45 1/4. First support is seen at US$10.00 and then at Thursday's low of US$9.92 1/4.

 

The DTN Meteorlogix weather forecast said the U.S. Midwest is in store for one more very cool night Friday before turning warmer. There is no significant risk of a hard freeze during the next 7 days or longer. Rainfall increases early next week, possibly delaying field work.

 

In the U.S. Delta, it still looks to be mainly dry into Monday, but looks to turn fairly wet during Tuesday and Wednesday. Rainfall will delay/disrupt field work, Meteorlogix added.

 

In deliveries, Oct soymeal deliveries totaled 98 lots. A customer account at ADM Investor Services issued 95 lots, while stoppers were scattered among various commission houses. The last trade date assigned was September 29.

 

Oct soyoil deliveries totaled 3,552 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 2.

 

In overseas markets, Crude palm oil futures on Malaysia's derivatives exchange fell as much as 7.5% Friday, hitting a fresh 18-month low on spillover weakness from a broad-based sell-off in commodities and rising palm oil inventories. The benchmark December contract on Bursa Malaysia Derivatives ended MYR90 lower at MYR2,000 a metric tonne.
   

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