February 24, 2009

Chicago Board of Trade soybean futures are expected to open Tuesday's day session lower, following the lead of overnight action, with a quiet news front and economic concerns keeping buyers sidelined.

 

CBOT soybean futures are called 4 cents to 6 cents lower.

 

In overnight electronic trading, March soybeans finished 5 3/4 cents lower at US$8.67, and May soybeans were 7 1/4 cents lower at US$8.68 3/4. May soymeal was US$3.30 lower at US$270.00 per short tonne, while May soyoil ended 32 points lower at 30.30 cents per pound.

 

The absence of fresh supportive news to spur buying interest will lend pressure to prices, with economic worries a bearish feature limiting buyer's willingness to take on added risk, analysts said.

 

Traders are seemingly content to take a cautious approach, awaiting fresh news to generate momentum amid a lack of definitive influence from outside markets in early action, analysts added.

 

Meanwhile, traders will keep a close eye on comments from Federal Reserve Chairman Ben Bernanke's testimony before Congress, U.S. President Barack Obama's address to Congress on Tuesday evening and reports on Argentina farmers strike as Ag groups meet with the government.

 

Looking at technical charts, the next upside price objective for May soybeans is to push and close prices back above psychological resistance at US$9.00 a bushel, a technical analyst said. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$8.54 1/4 a bushel. First resistance for May soybeans is seen at US$8.85 and then at Monday's high of US$8.95 3/4. First support is seen at Monday's low of US$8.61 1/4 and then at US$8.54 1/4.

 

The T-storm LLC's weather forecast said dry weather continues across Argentina through this weekend, with gradual warming occurring. A round of thunderstorms is probable next week in Argentina, with the highest chance of storms Monday.

 

Meanwhile, a substantial slowing of harvesting is not expected in Brazil, as a drier weather pattern may begin next week, T-storm said.

 

In demand news, China has purchased at least 90,000 metric tonnes soyoil since Friday at prices between US$685 and US$690 a metric tonne, on a cost and freight basis, and is looking for more cargoes, said a Jakarta-based executive with an international trading company Tuesday. He said soyoil's shrinking price premium over palm olein has spurred trades recently.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, tracking a rise on the CBOT Monday. The benchmark September 2009 soybean contract settled RMB19 higher at RMB3,461 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange eased Tuesday on weakness in soyoil futures, but news of higher export estimates for Feb. 1-25 helped raise prices off morning lows, trade participants said. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR9 lower at MYR1,871 a metric tonne, off the intraday low of MYR1,828.