February 18, 2009

Chicago Board of Trade soybean futures are seen starting Wednesday's day session lower, following the overnight theme on carryover technical selling.

CBOT soybean futures are called 2 cents to 4 cents lower.

In overnight electronic trading, March soybeans finished 4 cents lower at US$8.99, and May soybeans were 6 1/2 cents lower at US$8.98. March soymeal was US$1.70 lower at US$281.80 per short tonne, while March soyoil ended 15 points lower at 31.00 cents per pound.

A quiet news front and the absence of fresh bullish inputs are keeping bearish technical momentum flowing, with improved rain potential for South American crops keeping a defensive tone in the market, analyst said.

A technical analyst said prices are in a six-week-old downtrend on the daily bar chart. The next upside price objective for May soybeans is to push and close prices back above solid technical resistance at Tuesday's high of US$9.61 3/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$8.50 a bushel.

First resistance for March soybeans is seen at US$9.25 and then at US$9.40. First support is seen at US$9.00 and then at US$8.80.

A lack of a definitive influence from outside markets in early action is failing to provide guidance for prices, traders said. However, oversold conditions open the door for short covering to emerge on any sign of selling exhaustion, but with an uncertain economic outlook cautious activity is expected to linger, traders added.

The DTN Meteorlogix weather forecast said it appears hot, dry weather Wednesday and Thursday will give to thunderstorms Friday in Argentina. This is especially likely for major corn and soybean areas.

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled sharply lower Wednesday, along with widespread losses in other markets. The benchmark September 2009 soybean contract settled down RMB131, or 3.8%, at RMB3,343 a metric tonne.

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday tracking selloff across asset classes including equities and crude oil, soyoil, and revival of rains in soybean growing regions in Argentina, said trade participants. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR20 lower at MYR1,875 a metric tonne, off an intraday low of MYR1,842.