April 16, 2008

 

CBOT Soy Outlook on Wednesday: Mixed, consolidating, quiet news front

 

 

Chicago Board of Trade soybean futures are expected to start Wednesday's day session with a mixed undertone, consolidating amid market uncertainties and a lack of fresh news.

 

CBOT soybean futures are called to start the session mixed, with old crop futures seen steady to 1 cent lower, while new crop contracts are called 1 to 2 cents higher.

 

In overnight electronic trading, July soybeans were 1/2 cent lower at US$13.96 1/2, November soybeans were 2 1/4 cents higher at US$13.02 1/4. July soyoil was unchanged at 63.27 cents per pound and July soymeal was US$0.20 higher US$353.80 per short tonne.

 

The absence of fresh fundamental news has soybeans poised for two-sided action, with the uncertainty of 2008 acreage and unresolved issues surrounding potential for the resumption of the Argentine farmer's strike, have traders taking a cautious approach, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

"Weather is a dominant factor in the market, with traders eagerly watching weather patterns for signs of if we will get more corn acres or more soy acres amid current planting delays," he added.

 

Profit taking after the market's recent run up is seen weighing on prices, with overnight weakness in Asian soybean and palm oil futures adding pressure, analysts said.

 

However, the daily influence of record high crude oil, record lows in the U.S. dollar index, solid underlying demand and strengthening interior basis levels is expected to limit downside potential, with speculative fund buying remaining an underpinning feature, analysts added.

 

A technical analyst said market bulls have solid upside technical momentum. The next upside price objective for July soybeans is to push and close prices above solid technical resistance at US$14.50 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$13.38 3/4, which would fill on the downside an upside price gap on the daily bar chart.

 

First resistance for July soybeans is seen at Tuesday's high of US$14.15 and then at US$14.25. First support is seen at US$13.92 and then at US$13.75.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Wednesday on technical selling. The benchmark January 2009 soybean contract settled down RMB28 at RMB4,158 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday amid speculative trading despite opening higher, as investors booked profits, said trade participants. The July contract ended MYR16 lower at MYR3,674/tonne, off an intraday low of MYR3,630, which was also Tuesday's low for the June contract, which was then the third month benchmark.

 

In other news, India's edible oil imports in March rose 33% on year to 421,686 metric tonnes despite high prices in the international markets and the peak domestic crushing period in the country, the Solvent Extractors' Association of India said Wednesday.

 

Imports of crude palm oil during the five months started November rose to 1.6 million tonnes compared with 1.0 million tonnes in the year-earlier period. Soyoil imports were 228,116 tonnes between November and March, up from 218,442 tonnes in the year-earlier period.