March 27, 2007

 

CBOT Soy Outlook on Tuesday: Flat down 1 cent; following overnight theme

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's session with a steady to lower undertone, influenced by overnight price action amid the absence of fresh fundamental news.

 

In e-CBOT trade, May was unchanged at US$7.58 1/2 and November soybeans were 1/4-cent lower at US$8.01.

 

CBOT soybean futures are called to start the session steady to 1-cent lower.

 

A quiet news front is expected to keep technical factors in play, with traders watching speculative fund activity for potential signs of a continuation of long liquidation pressure that surfaced Monday, analysts said.

 

A slightly lower tone in outside markets with energy and metal futures drifting lower will add to the defensive presence, a trader said. Nevertheless, the focus of the market remains on Friday's plantings and stocks reports. Traders will continue to take a cautious approach to the market, on guard for fund movement as participants square a few positions ahead of the plantings report.

 

U.S. Department of Agriculture is scheduled to release its prospective plantings and quarterly grain stocks reports Friday 8:30 a.m. ET (1230 GMT).

 

Meanwhile, a technical analyst said the next downside price objective for May soybeans is closing prices below solid support at US$7.50. Soybean bulls would regain some fresh technical momentum by producing a close above solid chart resistance at last week's high of US$7.75.

 

First resistance for May soybeans is seen at Monday's high of US$7.64 3/4 and then at US$7.69 - the top of Monday's downside price gap on the daily bar chart. First support is seen at Monday's low of US$7.52 1/2 and then at US$7.50.

 

The DTN Meteorlogix Weather Service forecast said episodes of scattered showers and thundershowers are expected in the western Midwest Tuesday through Saturday. Rainfall should average 0.75 to 2.50 inches and locally heavier. Temperatures will average above normal.

 

In the eastern Midwest, a chance for light or locally moderate showers is on tap for Tuesday and Wednesday, before drier conditions return Thursday. Temperatures will average above normal. Scattered showers and thunderstorms are forecast for Friday into Saturday, with temperatures averaging above normal. Meteorlogix's 6-10 day outlook for Midwest, calls for temperatures near to below normal, with precipitation near to above normal.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, tracking Monday's losses in CBOT soybeans. The benchmark September 2007 contract settled RMB22 lower at RMB3,191 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Tuesday after an uneventful trading day as an uncertain near-term outlook kept participants on the sidelines. The benchmark June contract ended at MYR2,003 a metric tonne, up MYR8 from Monday.