February 11, 2009

Chicago Board of Trade soybean futures are expected start Wednesday's day session lower, pressured by South American weather and economic jitters.

 

CBOT soybean futures are called 7 cents to 10 cents lower.

 

In overnight electronic trading, March soybeans finished 11 3/4 cents lower at US$9.82 1/4. March soymeal was US$4.00 lower at US$308.10 per short tonne, while March soyoil ended 49 points higher at 33.89 cents per pound.

 

Overnight rains were heavier-than-expected in drought stricken areas of Argentina and some forecasters had added a touch more moisture in nearby outlooks, enticing traders to extract some risk premium from prices, analysts said.

 

Lingering economic fears are adding pressure, as buyers take a cautious approach amid the uncertainties surrounding global economies, analysts added.

 

The market poised for a choppy, volatile trade with participants watching weather updates and movements in financial markets for a sense of direction, a CBOT floor broker said.

 

A market technician said the next upside price objective for March soybeans is to push and close prices back above solid technical resistance at the January high of US$10.60 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$9.34 1/2 a bushel.

 

First resistance for March soybeans is seen at US$10.00 and then at Tuesday's high of US$10.10. First support is seen at Tuesday's low of US$9.82 1/4 and then at US$9.76 3/4.

 

The DTN Meteorlogix weather forecast said thunderstorms Tuesday and overnight were heavier-than-expected as it concerns southern Sante Fe, Entre Rios, and the northeast Buenos Aires region. However, the pattern still looks drier and hotter than normal during the next 10 days, Meteorlogix said. Meanwhile, crop stress continues in La Pampa and western Buenos Aires where rainfall has been less during the past week.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday after a mildly friendly U.S. Department of Agriculture report triggered profit-taking on CBOT Tuesday. The benchmark September 2009 soybean contract settled RMB39 or 1.1% lower at RMB3,541 a metric tonne.

 

Meanwhile, China's soybean and edible oil imports in January fell sharply on year as traders were unwilling to make aggressive purchases amid expectations of a slide in demand. Soybean imports last month reached 3.03 million metric tonnes, down 12% on year, according to preliminary data issued by the General Administration of Customs on Wednesday.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday on profit-taking and weakness in soyoil futures, said trade participants. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR44 lower at MYR1,925 a metric tonne.