March 25, 2008

 

CBOT Soy Outlook on Tuesday: Up 30-40 cents; follow-through, outside markets

 

 

Soybean futures on the Chicago Board of Trade are expected to open Tuesday's day session sharply higher, continuing the overnight theme on follow through buying from Monday's limit up close, analysts said.

 

CBOT soybean futures are called to start the session 30 to 40 cents higher.

 

In overnight electronic trading, May soybeans were 43 cents higher at US$13.00, July soybeans were 42 cents higher at US$13.14. May soyoil was 99 points higher at 56.76 cents per pound and May soymeal was US$9.50 higher at US$339.80 per short tonne.

 

Carryover buying from Monday's strong gains has soybeans poised for a sharp rise in early trade, with bullish inflationary signals from higher crude oil and metal futures coupled with a lower U.S. dollar index expected to attract speculative fund buying, analysts said.

 

Monday's synthetic options close well above the limit up settlement in the futures pit, set the tone for overnight trade, with strength in Asian markets feeding bullish appetites to extend the recovery bounce from last week's heavy losses, traders said.

 

Supportive longer range fundamental outlooks surrounding the uncertainty of 2008 acreage and production in a year where strong output is needed to meet strong demand is expected to underpin prices as well, a CBOT floor analyst said.

 

A technical analyst said regardless of Monday's limit up close, very serious near-term chart damage has been inflicted recently to still suggest a near-term market top is in place. The next upside price objective for July soybeans is to push prices above major psychological resistance at US$13.00 a bushel. The next downside price objective is pushing and closing prices below strong technical support at last week's low of US$12.22.

 

First resistance for July soybeans is seen at US$13.00 and then at US$13.30. First support is seen at US$12.50 and then at Monday's low of US$12.25.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Tuesday, following strong gains at the CBOT Monday. The benchmark January 2009 soybean contract settled RMB125 higher, or 3%, at 4,230 a metric tonne, after trading between RMB4,175/tonne and RMB4,276/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange rose 4.79% Tuesday after cargo surveyor SGS (Malaysia) Bhd. Estimated a 100% on-month rise in palm oil exports to China during the Mar. 1-25 period and Indonesia doubled the crude palm oil export tax for April, trade participants said. The benchmark June CPO futures on Bursa Malaysia Derivatives ended MYR160 higher at MYR3,500/tonne.