February 10, 2010

 

CBOT Soy Outlook on Wednesday: Down 1-3 cents, follow overnight; bearish technicals

 

 

A lack of a definitive influence from outside markets and bearish technical action have Chicago Board of Trade soybean futures poised to start Wednesday's day session modestly lower.

 

Overnight, CBOT March soybeans fell 1/2 cent to US$9.24 a bushel. CBOT soybeans are forecast to open Wednesday's day session 1 cent to 3 cents lower.

 

The market is seen following the overnight theme, with the weight of record South American crop prospects continuing to apply pressure to prices.

 

"At this point you could flip a coin on the direction prices, with consolidative action taking shape as the market lacks momentum to push prices in either direction," said Victor Lespinasse, analyst with Grainanalyst.com.

 

Tuesday, soybeans were greeted with a supportive supply-and-demand report and friendly outside markets, but still lacked strength to sustain early advances.

 

A choppy theme is expected, with prices unlikely to sustain rallies ahead of the South American soybean harvest, AgResource said in a market note.

 

"The unwinding of oil/meal spreads is expected following several days of strong gains," AgResource added in the note.

 

In early trade, the U.S. dollar index is up slightly, and crude oil and metal futures are posting modest declines.

 

U.S. Department of Agriculture announced Wednesday that its weekly export sales report normally released Thursday will be postponed due to the closure of federal offices resulting from an east coast snow storm.

 

In other news, Chinese import statistics for January show edible oil and soybean purchases rose early. Initial data from the General Administration of Customs on Wednesday showed edible oil imports were up 86% on the year and soybean imports were up 35% on the year.

 

Current imports of soybeans might be strong, but the China National Grain and Oils Information Center said Wednesday that for the second half of the 2009-10 crop year purchases may taper off due to a high comparative base last year. The think tank also suggested U.S. imports will fall as South American supplies come available, as normal for this time of the year.

 

In overseas markets, Dalian Commodity Exchange soybean futures fell Wednesday, weighed down by global supply concerns from forecasts of a record crop looming in South America. The September 2010 soybean contract settled down RMB28, or 0.7%, at RMB3,779 a metric tonne.

 

Bursa Malaysia Derivatives crude palm oil futures rose a bit as traders bought back previously sold positions. Support also came from bullish supply-demand data showing lower palm oil production and inventory for January.

 

Rotterdam soybean prices were steady while soymeal prices were lower. European vegoil prices were generally firmer.