March 17, 2009

Soybean futures on the Chicago Board of Trade could be inspired by overnight gains to rise 2-4 cents during Tuesday's opening trades, analysts said.

 

In overnight electronic trading, May soybeans rose 5 1/2 cents to US$9.16 1/2 per bushel. The July contract added 7 cents to US$9.14 1/2 and November soybeans gained 6 1/4 to US$8.56 3/4. May soymeal added US$1.50 to US$289.90 per short tonne and May soyoil increased 16 points to 31.02 cents per pound.

 

"Soybeans look ready for more gains on the open this morning, after ending the overnight session higher," said Bryce Knorr, Farm Futures senior editor in a Tuesday morning market commentary.

 

"Futures recovered from early profit-taking in the electronic-only trade thanks to a late rally in crude oil, which continues to play the role of the alter ego for the soy complex," Knorr added.

 

Nearby crude oil futures are weaker as are equities futures, while the U.S. dollar index is up, which adds pressure to the agricultural commodities market, traders and analysts say.

 

"Soybeans rallied yesterday despite widespread ideas farmers will increase acreage dramatically this spring," Knorr said, noting the Farm Futures survey put bean acreage at a record 80.73 million, up more than 6% from the 75.7 million planted a year ago.

 

On the technical side, soybeans hit a four-week high Monday and "produced a bullish upside breakout from a sideways trading range," a market technician said.

 

Market bulls are looking to close prices back above solid technical resistance at US$9.40 a bushel, the technician said, marking first resistance at Monday's high of US$9.18 and then at US$9.25.

 

The bears are aiming to close May soybeans below solid technical support at the March low of US$8.38 1/4 a bushel, he said, pegging first support at US$9.00 and then at US$8.90.

 

In global trading news, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, following strong gains on the Chicago Board of Trade overnight.

 

The benchmark September 2009 soybean contract settled RMB33 a metric tonne higher at RMB3,525/tonne, or up 0.9%, after trading between RMB3,510 and RMB3,545 a tonne during the session.

 

China's soybean imports in the second quarter of this year may fall on year due to lower global prices, said a government think tank Tuesday.

 

Significant lower soybean prices in February will keep traders and processing plants on the sidelines as they are making losses on earlier purchases, and they may even cancel earlier contracts, the China National Grain and Oils Information Center said in a report.

 

Crude palm oil futures on Malaysia's derivatives exchanged ended higher Tuesday, recovering some of the previous day's losses on spillover gains from soyoil and crude oil as well as on good demand in the cash market, trade participants said.

 

The benchmark June contract on Bursa Malaysia Derivatives ended MYR20 higher at MYR1,922 a metric tonne after reaching an intraday high of MYR1,940.

 

CBOT floor traders said they expect more clarity on Argentine export potential following a Tuesday meeting scheduled between Argentina's government and farmers.

 

Farmers, who are just beginning to harvest their drought-stressed soybeans, will meet with government officials for the fourth round of weekly talks, which have produced a partial agreement to avoid new strikes. The situation remains tense over export taxes.