March 23, 2010

 

CBOT Soy Outlook on Tuesday: Seen higher, following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are poised for a slightly higher start to Tuesday's day session, following the overnight theme, as traders cover short positions ahead of next week's plantings report.

 

CBOT soybeans are seen opening 1 cent to 2 cents higher.

 

Overnight, CBOT May soybeans were 2 1/2 cents higher at US$9.71 a bushel.

 

A quiet news front is providing little fundamental direction for prices, with traders evening positions in an effort to reduce risk exposure ahead of the March 31 planting intentions report, analysts said.

 

The absence of farmer selling is producing some underlying support, but a lack of old crop export demand and a record South American harvest is seen limiting upside potential. A firmer U.S. dollar and weakness in crude oil and metals futures is expected to provide some psychological pressure to prices.

 

Technical strength associated with the most active May contract's ability to settle above major moving average chart support Monday is giving buyers confidence that a near-term low was in place ahead of the planting report, a CBOT floor analyst said.

 

A technical analyst said the next downside price objective for May soybeans is pushing and closing prices below solid technical support at the March low of US$9.21 3/4. The next upside technical objective is pushing and closing May prices above solid technical resistance at the February high of US$9.85.

 

Otherwise, choppy activity is expected, with the jockeying of positions ahead of the March 31 reports from the U.S. Department of Agriculture on planting intentions and quarterly stocks.

 

Meanwhile, USDA announced private export sales Tuesday of 120,000 metric tonnes of soybeans for delivery to unknown destinations in the 2010-11 marketing year.

 

In other news, China's Ministry of Commerce increased its forecast for soybean imports in March to 4.56 million metric tonnes from an earlier estimate of 3.9 million tonnes. Last March, China imported 3.86 million tonnes of soybeans.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, along with the mild gain on CBOT Monday. The September 2010 soybean contract settled up RMB13, or 0.3%, at RMB3,880 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Tuesday as a rumor that Indonesia may raise its export tax next month spurred some participants to push the benchmark price toward a key psychological resistance level, traders said. The June contract on the Bursa Malaysia Derivatives exchange ended MYR21 higher at MYR2,591 a metric tonne.