January 17, 2007

 

CBOT Soy Outlook on Wednesday: Seen up 5-7 cents; e-CBOT theme, tech buys

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session on firm footing, continuing the overnight theme as the market bounces back from Tuesday's consolidative declines.

 

Soybean futures are called to open 5 to 7 cents higher.

 

In e-CBOT trade, March was 7 1/4 cents higher at US$7.15 3/4 per bushel.

 

The strength of the market will be based on technicals, with ideas the bulk of index fund rebalancing is behind grain futures, providing buyers with more confidence to bounce prices, said Don Roose, president U.S. Commodities in West Des Moines, IA.

 

Otherwise, futures have little to direct prices amid a quiet news front, with traders keeping a close eye on activity in corn futures as the two markets will continue to battle for 2007 acreage, a CBOT trader said.

 

A technical analyst said market bulls are suddenly in firm technical control of soybean futures, with the next upside price objective for the March soybeans to close prices above solid resistance at the contract high of US$7.23 3/4. The next downside price objective is closing prices below solid support at US$7.00.

 

First resistance for January soybeans is seen at Tuesday's high of US$7.19 and then at US$7.23 3/4. First support is seen at Tuesday's low of US$7.05 3/4 and then at US$7.00.

 

The DTN Meteorlogix Weather Service forecast said hot and dry weather is on tap for a couple days in Argentina's crop areas, however generally favorable conditions for developing corn and soybeans are expected to continue. In Brazil, there are concerns that the persistent wetness in the northern soybean areas could lead to increased soybean rust issues in the coming weeks. Mainly favorable conditions are in store for the southern belt, Meteorlogix forecasts.

 

In deliveries, eighteen delivery notices were posted against the January soyoil futures. The last trade date assigned was Jan. 11.

 

Rotterdam soybeans were lower and soymeal were mixed. European vegoils were mostly lower.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday on strong local demand, despite profit-taking at the CBOT Tuesday, analysts said. The most active September 2007 contract gained RMB11 to settle at RMB3,098 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Wednesday, dragged down by declines in soyoil, improving crop weather conditions and doubts about biodiesel demand, analysts said. The benchmark April contract ended at MYR1,903 a metric tonne, down MYR44.