March 2, 2010

 

CBOT Soy Outlook on Tuesday: Flat-down 1 cent; large supply, solid demand

 

 

Chicago Board of Trade soybeans are expected to open flat to slightly lower Tuesday, as solid export demand is balanced by the large South American crop on the way.

 

Soybeans are called steady to 1 cent lower. In overnight trade, March soybeans were down 1/2 cent to US$9.52 per bushel and May soybeans were flat at US$9.62 1/2.

 

May soymeal was down US$0.40 to US$268.0 per short tonne and May soyoil was down 3 points to 39.87 cents per pound.

 

With little movement overnight and an unchanged dollar, the market has no direction heading into the day session, traders said.

 

Although the corn market has seen some recent strength thanks to concerns about excessive moisture ahead of U.S. planting, generally the world "appears well supplied heading into South American harvest of what could well be record large production," Benson Quinn Commodities analyst Kim Rugel said in a commentary.

 

Market losses could be limited by recent rainfall in Brazil, which has slowed early harvest progress, as well as the "continued strong pace of soybean export shipments," Doane Advisory Service said in a morning commentary.

 

Weekly export inspections of 40.126 million bushels far exceeded trade estimates, analysts said.

 

The next downside price objective for the bears is pushing and closing prices below solid technical support at US$9.41. The next upside technical objective for the bulls is pushing and closing May prices above solid technical resistance at last week's high of US$9.85.

 

First resistance for May soybeans is seen at Monday's high of US$9.68 and then at US$9.75. First support is seen at Monday's low of US$9.53 1/2 and then at US$9.50.

 

In other markets, China's soybean futures traded on the Dalian Commodity Exchange settled little changed Tuesday, with outside markets weighing on prices.

 

The benchmark September soybean contract settled RMB2 higher at RMB3,882 a metric tonne.

 

Also, crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday as investors took cues from weaker soyoil to book profits, said trade participants.

 

The benchmark May CPO contract on the Bursa Malaysia Derivatives ended MYR18 or 0.7% lower at MYR2,612/tonne after moving in both positive and negative territory.

 

In other international news, Malaysian crushers want to buy between 80,000 and 100,000 tonnes of soybeans for shipment in May and June, likely from South America, trading executives said Tuesday.

 

Traders said Malaysia is seeking delivered cargoes at a US$1.50 premium to Chicago Board of Trade soybean prices.