February 3, 2009

Chicago Board of Trade soybean futures are poised for a lower start to Tuesday's day session, pressured by heavier-than-expected overnight rains in Argentina and lingering economic woes.

 

CBOT soybean futures are called 8 cents to 10 cents lower.

 

In overnight electronic trading, March soybeans finished 11 3/4 cents lower at US$9.47 3/4. March soymeal was US$4.10 lower at US$302.10 per short tonne, while March soyoil ended 18 points lower at 31.58 cents per pound.

 

The much needed precipitation in Argentina extended Monday's weak tone overnight. Forecasts calling for another storm system to move through Argentina in the upcoming weekend are seen as a bearish feature aiding crops, as they move into their critical pod filling stage of development, analysts said.

 

Meanwhile, lingering economic woes are limiting buying interest as well, with mixed signals form outside markets not providing a clear path for prices, analysts added.

 

Otherwise, a quiet news front will keep traders eyeing weather forecasts, taking a cautious approach awaiting new demand news or a shift in weather patterns, traders said.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices back above solid technical resistance at last week's high of US$10.41 1/2 a bushel. The next downside price objective is pushing and closing prices below major psychological support at US$9 a bushel.

 

First resistance for March soybeans is seen at Monday's high of US$9.76 1/4 and then at US$9.94. First support is seen at US$9.50 and then at Monday's low of US$9.43 1/4.

 

Weather forecasters from DTN Meteorlogix said thunderstorms overnight were heavier than expected in Argentina, especially in the southern Sante Fe province. The rains improved conditions for crop areas of Cordoba and southern Sante Fe. Still conditions are quite stressful over La Pampa and west Buenos Aires, but these areas may see a few storms Wednesday night.

 

In demand news, U.S. Department of Agriculture announced Tuesday private export sales of 25,000 metric tonnes of U.S. soyoil for delivery to unknown destinations in the 2008-09 marketing year.

 

In overseas markets, soybean futures gained ground on the Dalian Commodity Exchange Tuesday, as agricultural commodities were lifted across the board by speculative buying, slightly firmer crude oil and tightening supplies. The benchmark September 2009 soybean contract settled 1.5% higher at RMB3,425 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Tuesday in volatile trading, with the market seesawing between negative and positive territory on clashing cues, trade participants said. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR9 higher at MYR1,788 a metric tonne.