CBOT Soy Outlook on Wednesday: Down 5-7 cents; improved Argentina weather

 

 

CBOT soybean futures are called 5 cents to 7 cents lower.

 

In overnight electronic trading, March soybeans finished 8 1/2 cents lower at US$9.67 1/2. March soymeal was US$3.20 lower at US$305.40 per short tonne, while March soyoil ended 51 points lower at 32.26 cents per pound.

 

Rains overnight in parts of Argentina and forecasts for improved rain potential in the near term is seen limiting upside potential as traders trim risk premium from prices, analysts said.

 

Bullish traders are leery of crop conditions improving from needed moisture, as Argentine soy crops still have time to rebound heading into their critical pod filing stage of development, analysts said.

 

Meanwhile, soybeans demand is light with China - the world's largest soybean importer - absent from the market amid the Lunar Near Year holiday, a CBOT floor analyst added.

 

Mixed signals from outside markets are seen limiting buyer interest, but downside risks will remain limited as contrasting weather forecasts for Argentina remains an underpinning feature.

 

A market technician said the potential for a "February Break" seasonal phenomenon occurring soon does worry market bulls even more after Tuesday's downside price action. The next upside price objective for March soybeans is to push and close prices back above solid technical resistance at this week's high of US$10.41 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the January low of US$9.57 3/4 a bushel.

 

First resistance for March soybeans is seen at US$10.00 and then at Tuesday's high of US$10.17 1/4. First support is seen at Tuesday's low of US$9.73 and then at US$9.57 3/4.

 

The DTN Meteorlogix weather outlook said a few more thunderstorms in Argentina overnight helped out parts of Cordoba and southern Sante Fe but others missed out. The weather pattern tends to feature chances for thunderstorms but coverage is variable with each chance. It looks like a more favorable weather pattern for Cordoba crop areas. The drought will continue for La Pampa and southwest Buenos Aires, while conditions in the other areas are more uncertain and could go either way, Meteorlogix said in the forecast.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange will be closed until Feb. 1. The exchange is closed for the Chinese New Year holiday.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday tracking weakness in soybean oil and weak export data, said trade participants. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR48 lower at MYR1,782 a metric tonne in thin trade.