April 11, 2007

 

CBOT Soy Outlook on Wednesday: Seen up 3-5c; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's day session on firm footing, following the overnight theme as the market stages a minor technical recovery from recent declines.

 

In e-CBOT trade, May was 4 1/4 cents higher at US$7.46 3/4, July was 3 1/2 cents higher at US$7.64, and November soybeans were 4 3/4 cents higher at US$7.92 1/4.

 

CBOT soybean futures are called to start the session 3 to 5 cents per bushel higher.

 

Technical buying is expected to provide a boost to prices, with support at the lower end of a month-long trading range providing underlying strength, analysts said.

 

However, an absence of fresh news, concerns over possible acreage switching to soybeans, and an overall bearish technical trend is seen limiting upside potential, and possibly sending prices retreating after early buying is exhausted, analysts added.

 

Otherwise, speculative index fund rolling of May positions to deferred month futures are seen as featured attractions, traders added. Meanwhile, soyoil futures are expected to extend their recent price strength on underlying bullish global vegoils fundamental outlooks.

 

A technical analyst said July soybean prices are presently in the lower boundary of a wide trading range bound by the March low of US$7.54 and the April high of US$8.01. Soybean bulls would regain technical momentum by producing a close above solid chart resistance at this week's high of US$7.86. The next downside price objective is closing prices below solid support at US$7.54.

 

First resistance for May soybeans is seen at Tuesday's high of US$7.67 and then at US$7.70. First support is seen at Tuesday's low of US$7.56 and then at US$7.54.

 

The DTN Meteorlogix Weather Service forecast said snow and rain lingers in the western Midwest Wednesday, tapering to flurries overnight. Snowfall of 4 inches or more is possible over much of eastern Iowa and in southeast Minnesota. Mainly dry conditions are on tap for Thursday, but snow or rain may redevelop Friday through southern locations. Temperatures will average below normal during this period.

 

In the eastern Midwest, snow is moving through northwest parts of the region and far north Wednesday. Snow may linger in northern areas early Thursday, before drier conditions emerge. Snow or rain may redevelop in southern areas late Friday or Friday night. Precipitation from the first system will average 0.25-1.00 inch. Snow of at least 4 inches is possible over far northern Illinois and through Wisconsin and northern Michigan. Temperatures will average below or well below normal during this period, Meteorlogix forecasts.

 

The Meteorlogix 6-10 day outlook for the Midwest calls for temperatures to average near to above normal in the northwest and near to below normal elsewhere in the region. Precipitation is seen near to above normal in the south and east, and near to below normal in the northwest.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Wednesday on an unfavorable U.S. Department of Agriculture report released Tuesday. The benchmark September 2007 contract settled CNY6 lower at CNY3,205 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Wednesday as continued bullish sentiment helped lift the market to its highest level in nearly eight and a half years. The benchmark June CPO contract ended at MYR2,188 a metric tonne, up MYR35 from Tuesday after moving between MYR2,165 and MYR2,205.