February 16, 2010

 

CBOT Soy Outlook on Tuesday: Seen higher; outside markets offer support

 

 

Soybean futures on the Chicago Board of Trade are seen higher to start Tuesday's day session, following the overnight theme on supportive outside market influences.

 

CBOT soybeans are seen opening Tuesday's day session 7 cents to 10 cents higher.

 

Overnight, CBOT March soybeans gained 10 3/4 cents to US$9.55 3/4 a bushel, and May soybeans were 10 cents higher at US$9.64.

 

Speculative short covering is expected to buoy futures, with the assistance of outside markets helping lift prices, analysts said.

 

The lack of fresh fundamental news coupled with the absence of Asian and South American participation due to the Lunar New Year and Carnival celebrations, respectively, is expected to keep attention on outside markets.

 

Weakness in U.S. dollar index futures is serving as a friendly feature in the commodity sector, with crude oil futures up sharply and gold and silver futures posting strong gains as well, said Victor Lespinasse, analyst with Grainanalyst.com.

 

Otherwise, traders are seen taking a cautious approach, awaiting fresh news to direct prices.

 

A technical analyst said market bulls have gained some fresh upside near-term technical momentum. The next upside technical objective for March soybeans is pushing and closing prices above solid technical resistance at US$9.65. The next downside price objective is pushing and closing prices below major psychological support at the February low of US$9.00.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST.

 

National Oilseed Processors Association's January soybean crush report, scheduled for release Tuesday after 8:30 a.m. EST, has been delayed until Wednesday at its usual time. The delay is due to the recent closure of NOPA offices due to inclement weather conditions.

 

The DTN Meteorlogix weather forecast said mainly favorable conditions are on tap for filling soybeans from Mato Grasso to Rio Grande do Sul during the next 10 days. There is some potential for harvest delays in the north.

 

In Argentina, episodes of scattered showers and thunderstorms and no significant hot weather will favor filling soybeans in the major growing areas, Meteorlogix said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange and crude palm oil futures on Malaysia's derivatives exchange were closed for the Lunar New Year holiday.

 

Rotterdam soybean prices were flat while soymeal prices were steady to higher. European vegoil prices were mostly higher.