March 24, 2009

 

CBOT Soy Outlook on Tuesday: Up on Argentine strike; other factors weigh

 

 

Chicago Board of Trade soybean futures are expected to start Tuesday's day session higher, supported by demand potential amid Argentina strike concerns, but outside influences are expected to apply pressure.

 

CBOT soybean futures are called 2 cents to 3 cents higher.

 

In overnight electronic trading, May soybeans were 7 1/2 cents higher at US$9.63. May soymeal was US$2.60 higher at US$301.00 per short tonne, while May soyoil ended 3 points lower at 33.07 cents per pound.

 

Argentina's farmer's strike and its potential to generate fresh export demand for the U.S. in an already tight 2008-09 marketing year supply situation should provide underpinning support to prices, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Argentine farmers continued to block roads across much of the country on Monday, sporadically letting traffic flow after ensuring no trucks loaded with grains or live cattle were moving in violation of a nationwide farm strike.

 

A one-week strike was launched Friday to protest grain export taxes.

 

However, concerns about Monday's technical reversal off session highs, early weakness in outside financial markets and position squaring heading toward next week's acreage report is seen applying pressure to prices, Roose added.

 

In early market action, stock index futures were lower, crude oil was down and the U.S. dollar index was higher.

 

Outlooks for a sizable jump in soybean acres when U.S. Department of Agriculture releases its Prospective Planting report next week is seen weighing on new crop contracts.

 

A technical analyst said soybean prices are in a steep three-week-old uptrend on the daily bar chart. The next upside price objective for May soybeans is to push and close prices back above solid technical resistance at today's high of US$9.81 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.00 a bushel.

 

First resistance for May soybeans is seen at US$9.60 and then at US$9.70. First support is seen at Monday's low of US$9.50 3/4 and then at US$9.40.

 

Soy product futures are seen mixed, with the realigning of meal/oil spreads aiding soymeal.

 

The DTN Meteorlogix weather forecast said cool, wet weather during the next 10 days in the U.S. Midwest will disrupt and delay spring fieldwork raising concerns about a spring planting season similar to last year. Some significant snowfall is possible in western areas on Thursday and Friday.

 

In overseas markets, soybean futures settled slightly lower on the Dalian Commodity Exchange Tuesday, pulling back from heavier losses earlier in the session as they tracked a recovery in CBOT electronic trade.

 

Crude palm oil futures on Malaysia's derivatives exchange fell on expectations of lower exports amid higher production, trade participants said Tuesday.