March 4, 2009

Chicago Board of Trade soybean futures are expected to start Wednesday's day session on firm footing, buoyed by supportive outside influences.

 

CBOT soybean futures are called 10 cents to 15 cents higher.

 

In overnight electronic trading, March soybeans finished 13 3/4 cents higher at US$8.76 1/2, and May soybeans were 12 1/2 cents higher at US$8.66. May soymeal was US$3.90 higher at US$268.60 per short tonne, while May soyoil ended 36 points higher at 30.78 cents per pound.

 

The absence of fresh fundamental news for the market to derive price direction from continues to keep outside macro markets in focus, analysts said.

 

The economy is the major factor in the minds of traders, and with crude oil and equities pointing higher in early action, short-covering is seen as an underpinning feature, analysts said.

 

However, the market remains in a bearish trend, with reports of progress between the Argentine government and farmers in an effort to avoid a repeat of last year's crippling farmer strike limiting upside potential. Improved harvest progress in northern Brazil, and good finishing weather in Argentina is expected to apply pressure as well.

 

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. The next downside price objective is pushing and closing prices below solid technical support at the contract low of US$7.86 1/2 a bushel.

 

First resistance for May soybeans is seen at this week's high of US$8.72 and then at US$8.85. First support is seen at this week's low of US$8.38 1/4 and then at US$8.25.

 

The DTN Meteorlogix weather forecast said rainfall in Argentina this week will continue to improve the outlook for late planted and second crop soybeans. In Brazil, a turn towards drier and hotter weather in the northern growing areas will favor the soybean and corn harvests.

 

The expanding Brazilian soy harvest is slightly negative to prices, as this adds available world soy supplies, analysts said.

 

Argentines breathed a sigh of relief Tuesday as farmers and the government came to a partial accord on the issues of meat, wheat and milk after more than five hours of talks to avoid a repeat of last year's crippling strikes. President Cristina Fernandez made a surprise visit to the meeting, seen as a conciliatory gesture to the farmers and the importance assigned to reaching a deal.

 

March soyoil deliveries totaled 1,038 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was March 3.

 

March soymeal deliveries totaled one lot. A customer account at R.J. O'Brien issued the lot, while a customer account at ADM Investor Services stopped the one lot. The last trade date assigned was January 23.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday amid growing optimism for the country's economy as the country's annual parliamentary meeting unfolds. The benchmark September 2009 soybean contract gained 0.7% to settle at RMB3,412 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended Wednesday at their highest level in more than two weeks as investors continued to cover shorts on a likely fall in production and inventories. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR47 higher at MYR1,902 a metric tonne.