December 11, 2008


CBOT Soy Outlook on Thursday: Steady, outside support vs corn weakness



Chicago Board of Trade soybean futures are expected to start Thursday's day session with a steady to firm undertone, garnering support from outside markets while expected weakness in corn and wheat apply spillover pressure.


CBOT soybean futures are called steady to firm.


The outside markets are seen directing prices once again, with the U.S. Department of Agriculture's supply and demand report failing to provide any surprises, analysts said.


U.S. soybean ending stocks were pegged at 205 million bushels, unchanged from the USDA's estimate in November, but above the average analyst estimate of 200 million bushels.


The USDA, in keeping with its historical norms, left U.S. soybean end stocks unchanged, a CBOT trader said.


In the supply/demand balance sheet, the government raised its export estimate by 30 million bushels to 1.050 billion bushels while decreasing the amount of soybeans it expects to be crushed by 30 million bushels to 1.715 billion bushels.


The market just didn't receive any fundamental news that should change the recent theme in the marketplace, with traders still cautious of macro economic uncertainty, analysts added.


Meanwhile, the USDA lowered its estimate of 2008-09 production for Brazil by 1 million metric tonnes to 59 million and left Argentina's production unchanged at 50.5 million. Projected soybean world ending stocks for the 2008-09 crop year were estimated at 54.19 million tonnes, up from the 54.06 million forecast in November.


USDA reported total weekly soybean export sales were a net 811,800 metric tonnes for the week ended Dec. 4. Sales for 2008/09 were a net 809,800 metric tonnes. Analysts had forecast sales between 500,000 and 800,000 metric tonnes. The primary buyer was China with 636,300 metric tonnes. Soymeal sales were a net 18,600 tonnes, below trade estimates ranging from 70,000 to 125,000 tonnes. Soyoil commitments were a net 400 metric tonnes. Analysts had forecast sales between zero and 10,000 tonnes.


USDA also announced Thursday private export sales of 120,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.


A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at US$8.75 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the contract low of US$7.76 1/4 a bushel.


First resistance for January soybeans is seen at Wednesday's high of US$8.42 and then at US$8.50. First support is seen at Wednesday's low of US$8.10 and then at US$8.00.


In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled slightly higher Thursday, tracking a rise at CBOT on Wednesday. The benchmark May 2009 soybean contract settled RMB14, or 0.5%, higher at RMB3,015/tonne.


Crude palm oil futures on Malaysia's derivatives exchange closed 3.1% higher Thursday after hitting a 10-day high, on brisk purchases by India, heavy rains in oil-palm-growing regions and year-end book squaring, trade participants said. The benchmark February contract on the Bursa Malaysia Derivatives ended MYR49 higher at MYR1,644 a metric tonne.

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