February 12, 2008

 

CBOT Soy Outlook on Tuesday: Up 3-6 cents on overnight bounce in prices

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session higher, rising in step with the overnight price theme.

 

CBOT soybean futures are called to start the session 3 to 6 cents higher.

 

In overnight e-CBOT trading, March soybeans were 4 cents higher at US$13.30, July soybeans were 4 cents higher at US$13.58 1/2, and November soybeans were 6 cents higher at US$12.88.

 

The market is poised to move higher following an overnight bounce from Monday's setback, but a choppy tone may be the order of the day, as traders keep an eye on Minneapolis wheat futures and weather in South American soybean areas, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Consolidative trade is expected to dictate price direction in the absence of fresh fundamental news, traders said.

 

However, the market will remain respectful of movements in outside markets as well as adjusting to the reality of just how many acres soybeans will lose to spring wheat, with lingering concerns over the potential size of South American crops promoting a choppy atmosphere, Roose added.

 

A technical analyst said soybean bulls were impressed Monday by the market's ability to hold off strong selling pressure in the face of a meltdown in nearby Chicago and Kansas City wheat futures. However, recent price action does suggest the bean bulls are becoming tired, he added.

 

The next upside price objective for July soybeans is to push and close prices above solid resistance at the contract high of US$14.05 a bushel. The next downside price objective is pushing prices below solid technical support at US$13.30. First resistance for July soybeans is seen at Monday's high of US$13.63 and then at US$13.75. First support is seen at Monday's low of US$13.44 and then at US$13.30.

 

The DTN Meteorlogix Weather Service said weekend rain through Brazil's southern belt favors filling soybeans. However, any early harvesting in northern Parana may be delayed. The northern Brazil soybean harvest may also be delayed by showers this week.

 

In Argentina, there are generally favorable conditions for filling soybeans due to recent rains and no severe heat.

 

In other news, the National Commodities Supply Corp, Conab, Tuesday said Brazil should harvest 58.5 million metric tonnes of soybeans in the 2007 08 crop. The number is roughly on par with Conab's January estimate, and not much higher than the 2006-07 year end production totals.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday amid volatile and speculative trading, trade participants said. The benchmark April contract on the Bursa Malaysia Derivatives ended MYR37 lower at the day's low of MYR3,375 a metric tonne.

 

Soybean and corn futures traded on the Dalian Commodity Exchange were closed for the Chinese New Year holiday.