February 23, 2010

 

CBOT Soy Outlook on Tuesday: Flat down 2 cents, consolidation featured

 

 

Soybean futures at the Chicago Board of Trade are poised for a steady to weaker start to Tuesday's day session as the market consolidates in the absence of fresh directive influences.

 

CBOT soybeans are seen opening flat to 2 cents lower.

 

Overnight, CBOT March soybeans ended 1/2 cent higher at US$9.62 a bushel, and May soybeans were 1/4 cent lower at US$9.68 3/4.

 

A quiet news front is allowing a firmer U.S. dollar and sharp declines in crude oil futures to lend pressure to prices.

 

The market looks to see a turnaround Tuesday type of trade, with futures attempting to move back and fill some of the upside moves from Monday's session, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

New crop futures will lead the declines, with fears of a wet spring leading to increased 2010 U.S. soybean acres talking points in the absence of other fresh fundamental news, Roose added.

 

Otherwise, bearish outside markets will help extend the overnight theme, with talk of a pick-up in grain movement in the U.S. and South America generating some underlying weakness in the market.

 

A market technician said the next downside price objective for May soybeans is pushing and closing prices below solid technical support at last week's low of US$9.41. The next upside technical objective is pushing and closing May prices above major psychological resistance at US$10.00.

 

The DTN Meteorlogix weather forecast said less rainfall from Brazil's Parana north to Mato Grosso will favor mature crops and harvests for another 1-3 days. However, wet weather returns after that. This means harvest delays later this week, Meteorlogix said.

 

In Argentina, the heavy rains of recent days appear to be coming to an end. The fields will slowly dry out during the next 5-7 days, favoring filling crops, Meteorlogix forecasts.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, tracking a rise on the CBOT Monday. The September 2010 soybean contract settled RMB38, or 1.0%, higher at RMB3,854 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended mostly higher Tuesday, as a continuing El Nino climate event may sap yields and cut output with production already seasonally low. The May CPO contract on the Bursa Malaysia Derivatives ended MYR4 higher at MYR2,635/tonne.

 

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