March 26, 2008

 

CBOT Soy Outlook on Wednesday: Up sharply as dollar, fundamentals support

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session sharply higher, taking its lead from overnight trade, as bullish outside market influences and supportive fundamentals extend the market's recovery from prior losses.

 

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

 

In overnight electronic trading, May soybeans were 46 3/4 cents higher at US$13.53 3/4, July soybeans were 45 1/2 cents higher at US$13.67 1/2. May soyoil was 122 points higher at 58.99 cents per pound and May soymeal was US$2.50 higher at US$352.80 per short tonne.

 

Continued weakness in the U.S. dollar, higher outside inflationary markets coupled with the back drop of potential export demand due a farmers strike curtailing Argentina's exports is expected keep speculative money flowing back into the market, analysts said.

 

Tuesday'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 providing further support to extend the recovery bounce from last week's heavy losses once again, traders said.

 

Supportive longer range fundamental outlooks revolving around the uncertainty of 2008 acreage and production in a year where strong output is needed to meet strong demand is expected to underpin prices also, traders added.

 

The U.S. Department of Agriculture is slated to issue its prospective plantings estimates Monday, and the markets and traders anticipate the market will start to see some positioning ahead of the release, a CBOT broker added.

 

A technical analyst said some recent chart damage was repaired Tuesday, but not all. The next upside price objective for July soybeans is to push and close prices above solid resistance at US$13.50 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$13.00.

 

First resistance for July soybeans is seen at US$13.30 and then at US$13.50. First support is seen at US$13.00 and then at US$12.72.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, following gains on the CBOT Tuesday. The benchmark January 2009 soybean contract settled RMB64 higher, or 1.5%, at 4,294 a metric tonne, after trading between RMB4,262/tonne and RMB4,348/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended sharply higher Wednesday at a 13-day high on fresh buying amid expectations of a surge in palm oil demand from India, Russia and China, said trade participants. The benchmark June contract on Bursa Malaysia Derivatives ended MYR200 higher at a 13-day high of MYR3,700 a metric tonne after trading in positive territory throughout the day.

 

In other news, most Indian trading companies haven't been contracting fresh imports of soyoil for the past month due to high prices, a senior trade executive said Wednesday. "There are no trades taking place in soyoil," said Sandeep Bajoria, chief executive, Sunvin Group, a Mumbai-based trading company.