January 9, 2008

 

CBOT Soy Outlook on Wednesday: Seen up 3-6 cents on follow through speculative buys

 

 

Chicago Board of Trade soybean futures are expected to start Wednesday's day session higher, continuing the overnight theme on follow through speculative buying from Tuesday's price gains, analysts said.

 

CBOT soybean futures are called to start the session 3 to 6 cents higher.

 

In overnight e-CBOT trading, January soybeans were 2 1/2 cents higher at US$12.59 per bushel, March soybeans were 6 cents higher at US$12.73, and July soybeans were 4 1/2 cents higher at US$12.99 1/2.

 

Bullish market sentiment is fueling upside momentum with broad based buying across commodity markets by speculative funds keeping sellers on the sidelines, analysts added.

 

Fresh speculative money is flowing into commodities, and with outlooks for tightening inventories, a battle for spring acres brewing coupled with solid global demand add fundamental strength to underpin prices, a CBOT floor analyst added.

 

A technical analyst said soybean bulls still have the near term technical advantage, but a profit-taking pullback soon would not be surprising. The next upside price objective for March soybeans is to push and close prices above Tuesday's contract high of US$12.79 1/2. The next downside price objective is pushing prices below solid technical support at US$12.36.

 

First resistance for March soybeans is seen at Tuesday's contract high of US$12.79 1/2 and then at US$12.90. First support is seen at Tuesday's low of US$12.62 and then at this week's low of US$12.47.

 

The DTN Meteorlogix Weather Service said a favorable weather pattern for developing soybeans throughout the major growing areas of Brazil will continue during the next 7-10 days.

 

In Argentina, a little more rain is indicated by weather models Wednesday, Meteorlogix said. Meteorlogix upped its precipitation amounts to .30-1.50 inches with locally heavier amounts. More rain and cooler temperatures are needed to support pollinating corn and developing soybeans stressed by recent hot, dry weather, Meteorlogix reports.

 

In deliveries, January soybean deliveries totaled 660 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing an issuer and stopper of 239 and 232 lots respectively. The last trade date assigned was Jan. 8.

 

January soymeal deliveries totaled 1,390 lots. Customer accounts at Man Professional Clearing issued and stopped 751 and 872 lots respectively. The last trade date assigned was Jan. 8.

 

January soyoil deliveries totaled 1,408 lots. Customer accounts at Man Professional Clearing issued and stopped 817 and 626 lots respectively. The last trade date assigned was Jan. 8.

 

In other news, India's soymeal exports could slow in the next few months because of severe logistical problems faced by exporters and extractors, a senior industry official said Wednesday. Exports have already been hurt by around 25% because of severe shortage of railway rakes, congestion and berthing delays in ports, said Davish Jain, chairman, of Central Organization of Oil Industry and Trade.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Wednesday, with market players still concerned the government may take more measures to curb rising soybean prices. The benchmark September 2008 soybean contract settled unchanged at RMB4,730 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended at a record high Wednesday, rising above MYR3,200 a metric tonne on strong gains in crude oil and soyoil prices as well as concerns of tight supply, trade participants said. The benchmark March contract on Bursa Malaysia Derivatives ended MYR40 higher at MYR3,201/tonne, after rising to an intraday high of MYR3,204/tonne.