February 24, 2010

 

CBOT Soy Outlook on Wednesday: Seen up, retracing Tuesday's setback

 

 

Soybean futures on the Chicago Board of Trade are expected to start Wednesday's day session higher, following the overnight theme, retracing Tuesday's declines.

 

CBOT soybeans are seen opening 2 cents to 4 cents higher.

 

Overnight, CBOT March soybeans ended 4 1/2 cents higher at US$9.57 a bushel, and May soybeans were 4 cents higher at US$9.63 1/2.

 

A lack of follow-through selling from Tuesday's late session slide coupled with a weaker U.S. dollar is seen attracting buyers in thin trade, as futures stabilize in thin trade, analysts said.

 

Lingering South American weather worries, as the market draws concerns about harvest delays are expected to add strength to prices. However, the absence of any definitive fundamental influences opens the door for two-sided price action, as traders eye outside macro markets for direction.

 

Traders will watch movements in the U.S. dollar for clues to direction, particularly with the potential impact of comments from U.S. Federal Reserve Chairman Bernanke as he makes an appearance before the U.S. House Financial Services committee.

 

A technical analyst 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 solid technical resistance at Tuesday's high of US$9.85.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled slightly higher Wednesday as traders awaited further cues after CBOT soybeans failed to hold onto gains. The September 2010 soybean contract settled up 4 yuan or 0.1% at RMB3,858 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday as investors liquidated long positions in anticipation of likely lower palm oil exports during the Feb. 1-25 period. The May CPO contract on the Bursa Malaysia Derivatives fell MYR45, or 1.7%, to end at MYR2,590/tonne.

 

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