January 30, 2008

 

CBOT Soy Outlook on Wednesday: Down 2-4 cents on overnight weakness

 

 

Chicago Board of Trade soybean futures are predicted to start day session trading 2-to-4 cents lower Wednesday, following the weaker tone established in the overnight session with fresh news lacking, a commission house analyst said.

 

In overnight e-CBOT trading, March soybeans fell 2 1/2 cents to US$12.64 1/4 per bushel and November soybeans slipped 1 3/4 cents to US$12.21. March Globex volume was 4,811 contracts.

 

The market should start out with a weaker tone, following the path established in the overnight session, the commission house analyst said. In addition, the weather in South America has improved a bit as of late and that could limit buying interest, the commission house analyst said.

 

However, the market acted well in Tuesday's session considering the weakness in CBOT wheat and could trade higher after a weaker start, a trader said.

 

Trading activity could be modest ahead of the Fed's decision on interest rates, expected to be announced after the close of trading. Beyond that there is not much news out to influence market direction, a floor analyst said.

 

Sprinkles and light showers are forecast in the next several days in much of Brazil's soybean producing regions, DTN Meteorlogix Weather said. Temperatures are expected to average near-normal to near-to-above normal in the period, Meteorlogix Weather said.

 

In Argentina, dry weather with only a few light showers are expected Thursday with mostly dry weather expected through Monday. Temperatures are expected to average near-to-below normal early in the period and near-to-above normal later in the period, Meteorlogix Weather said.

 

On daily technical charts, March soybeans closed higher and near the session high Tuesday on fresh technical and commodity fund buying, a technical analyst said. A bearish pennant pattern has formed on the daily bar chart, however a higher close Wednesday would likely negate that pattern and give market bulls more technical power, the analyst said.

 

First resistance for March soybeans is seen at US$12.70 and then at US$12.80. First support is seen at US$12.60 and then at Tuesday's low of US$12.47.

 

In overseas markets, crude palm oil futures settled higher, following the strength in crude oil markets, however, concerns over declining palm oil exports and rising stocks limited the upside, a trader said. The benchmark April contract on the Bursa Malaysia Derivative Exchange ended up MYR24 at MYR3,224/tonne.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange closed mixed on the lack of fresh news ahead of the Lunar New Year holiday in early February. The benchmark September contract slipped RMB/2 to RMB 4,665 per metric tonne.