November 8, 2008
CBOT Soy Review on Friday: Gains on USDA-report ideas, outside markets
Soybean futures at the Chicago Board of Trade closed higher and near the session high in light trading Friday, boosted by ideas of a friendly monthly U.S. Department of Agriculture crop production report due out Monday morning. Fund buying was featured in light volume.
January soybeans closed up 16 1/4 cents at US$9.22 1/4. November soybeans closed up 12 1/4 cents at US$9.11 3/4.
"We had a higher market today due to ideas Monday's USDA report will show lower soybean yields and a lower production figure," said long-time grain market analyst Victor Lespinasse of GrainAnalyst.com.
The key "outside markets" were mostly supportive for higher soybean prices Friday, said Brian Grete, senior markets analyst with the Pro Farmer advisory newsletter service, based in Cedar Falls, Iowa.
"Strength in crude oil and the U.S. stock market, along with mild weakness in the dollar, gave traders encouragement to cover short positions," he said.
Buying interest in the soybean complex was somewhat limited Friday following a dour U.S. jobs report that showed a larger-than-expected decline of 240,000 jobs during October. The 6.5% unemployment rate was also the highest in 14 years.
Traders are also anticipating Monday's monthly supply and demand report from the U.S. Department of Agriculture. A Dow Jones Newswires survey of 18 analysts found average soybean production estimates to rest at 2.916 billion bushels, below the USDA's current forecast of 2.938 billion bushels. The analyst's average soybean yield was 39.2 bushels per acre, below the USDA's 39.5. Analysts, on average, pegged new-crop carryout at 189 million bushels, compared to the USDA's current estimate of 205 million bushels. The USDA is scheduled to release updated estimates Monday at 8:30 a.m. EST.
Technically, soybean bears remain in overall near-term technical command, said a technical analyst. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at US$9.55 1/2 a bushel. The next downside price objective for the bears is pushing and closing prices below solid technical support at this week's low of US$8.74 1/4. First resistance for January soybeans is seen at Friday's high of US$9.18 and then at US$9.25. First support is seen at US$9.00 and then at Friday's low of US$8.94 3/4.
The soybean products closed mixed Friday. Soybean meal futures closed solidly higher and near the session high, while soybean oil closed weaker and near the session high. Meal was boosted by spreaders buying meal and selling soybean oil futures amid the present solid price downtrend in crude oil futures prices. December soybean meal closed up US$8.70 at US$271.50. December soybean oil closed down 15 points at 34.02 cents.
Soybean futures on China's Dalian Commodity Exchange settled slightly higher Friday, supported by gains in CBOT electronic trading. China's benchmark May 2009 soybean contract settled CNY15 higher at CNY3,264 per tonne, or up 0.5%.
Brazilian soybean-growing weather is seen as favorable for Parana, but more rain would benefit planting and developing soybeans through northern Mato Grosso. Drier weather would benefit Rio Grande do Sul for field work, according to Meteorlogix weather.