March 25, 2009

 

CBOT Soy Outlook on Wednesday: Down, follows overnight, lacks fresh support

 

 

A quiet news front coupled with mixed signals from outside markets have Chicago Board of Trade soybean futures poised to follow the lower overnight theme to start Wednesday's day session.

 

CBOT soybean futures are called 4 cents to 6 cents lower.

 

In overnight electronic trading, May soybeans were 6 1/2 cents lower at US$9.60 1/2. May soymeal was US$0.90 lower at US$302.40 per short tonne, while May soyoil ended 55 points lower at 32.72 cents s pound.

 

The market lacks fresh bullish news to stand on, with the Argentina strike and tight old crop inventories dialed into the market already, said Vic Lespinasse, an analyst with Grainsanalyst.com.

 

A firmer U.S. dollar and lower crude oil futures are seen applying outside pressure, but early strength in stock indexes is expected to limit downside weakness.

 

Futures are settling into a trading range, jockeying around as traders bide time, unwilling to take on added risk ahead of Tuesday's prospective plantings report, Lespinasse said.

 

A market technician said the next upside price objective for May soybeans is to push and close prices back above major psychological resistance at US$10.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.20 a bushel.

 

First resistance for May soybeans is seen at Tuesday's high of US$9.70 3/4 and then at this week's high of US$9.81 1/4. First support is seen at US$9.50 and then at US$9.40.

 

Soy product futures are seen lower, in step with overnight action.

 

The DTN Meteorlogix weather forecast said cool, wet weather during the next 10 days 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 Thursday and Friday.

 

In overseas markets, soybean futures drifted lower on the Dalian Commodity Exchange on Wednesday, extending a correction from U.S.-led gains last week, as expected import increases weighed on trading sentiment.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower in volatile trade as weaker soyoil futures clashed with better-than-expected palm oil exports data, trade participants said.