March 20, 2007

 

CBOT Soy Outlook on Tuesday: Steady to down 1 cent; lacks fresh fundamental news

 

 

Chicago Board of Trade soybean futures are set to start Tuesday's day session with a steady undertone, struggling to find direction in the absence of fresh fundamental news.

 

Soybean futures are called to open steady to 1 cent lower.

 

In e-CBOT trade, May was 1/2 cent lower at US$7.59 and November soybeans were 1 cent lower at US$8.02.

 

A quiet news front is poised to keep a choppy, two-sided theme in play, with technical factors the dominant force behind price moves, analysts said.

 

Speculative funds have been willing to defend market length at major moving average support beneath the market and with the 2007 acreage debate still a feature heading toward the March 30 plantings report, downside movement remain limited, traders said.

 

Otherwise, the market remains at the mercy of speculative interest, with traders anticipating another quiet session, unless fresh news surfaces or futures challenge technical points to spark fresh market activity.

 

A market technician said soybean bulls would gain better technical momentum by producing a close above solid chart resistance at last week's high of US$7.70 3/4 basis May futures. The next downside price objective is closing prices below solid support at this month's low of US$7.39 1/2.

 

First resistance for May soybeans is seen at Monday's high of US$7.60 and then at US$7.65. First support is seen at US$7.55 and then at US$7.50.

 

U.S. Midwest cash soybean basis bids were mostly steady Tuesday, cash traders said. Spot U.S. cash soybean bids were up 1 cent in Burlingtonne, Iowa.

 

The DTN Meteorlogix Weather Service forecast said rain is expected across the western Midwest this week, with heaviest totals in southern areas. Delays to transportation are possible but nothing major is expected. The eastern Midwest has episodes of showers and some rain on tap for the next seven days. This should keep any field work slow, Meteorlogix reports.

 

In other news, Brazil's soybean exports in the 2007-08 marketing year will likely be 10%-15% higher than 2006-07 exports, the country's Minister of Agriculture and Supply Luis Carlos Guedes Pinto told Dow Jones Newswires in an interview late Monday. The rise in soybean exports follows the expected higher output of Brazilian soybean this year, he said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday amid sluggish domestic consumption and a lack of market-moving news. The benchmark September 2007 contract settled unchanged at RMB3,209 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Tuesday after a busy trading day, boosted by steady soyoil prices, positive technical indicators and speculative buying amid weather concerns. The benchmark June contract ended at MYR1,977/tonne, up MYR7 from Monday after moving within a narrow range of MYR1,968-MYR1,980/tonne.