April 17, 2007

 

CBOT Soy Outlook on Tuesday: Down 2-4 cents, e-CBOT theme, lacks fresh news

 

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's day session on weaker footing, taking its cue from overnight trade, with an absence of fresh supportive news weighing on prices.

 

In e-CBOT trade, May was 4 1/2 cents lower at US$7.31 1/2, July was 4 3/4 cents lower at US$7.48 1/2, and November soybeans were 4 1/2 cents lower at US$7.78.

 

CBOT soybean futures are called to start the session 2 to 4 cents per bushel lower.

 

The market is poised for a lower start, influenced by a lack of planting progress for corn, leading to speculation of possible acreage switches to soybeans if the delays continue to linger on, analysts said.

 

U.S. Department of Agriculture reported Monday, U.S. corn planting progress improved by only 1 percentage point in the past week to 4% planted compared 8% last year and the five-year average of 9%.

 

Technical weakness and lagging exports as demand shifts to South American origins are seen keeping a lid on upside potential, traders said. However, analysts said a choppy, two-sided theme may greet traders again, with spillover support from neighboring grains, crude oil futures and the uncertainty of planting opportunities providing some underpinning strength.

 

A technical analyst said more choppy trading is in store for the near term, but maintains a bias that a near-term low was put in place in early April. The next downside price objective is producing a close below solid chart support at last week's low of US$3.61 1/4 basis the July contract. Market bulls would regain upside technical momentum by pushing prices above solid chart resistance at last week's high of US$3.85 1/2, he added.

 

The DTN Meteorlogix Weather Service forecast said the western Midwest will experience dry conditions or with only a few very light showers in southern locations during today. Wednesday and most of Thursday has a dry outlook, with a few light showers possible Thursday night. Temperatures will average above normal Tuesday, near normal Wednesday, and near to below normal Thursday. Mainly dry conditions are on tap for Friday, with scattered showers and thundershowers, possible during the weekend.

 

In the eastern Midwest, a dry outlook with possibly a few light showers is on tap for Tuesday and Wednesday, with dry conditions expected Thursday. Temperatures will average near-to-above normal Tuesday, near to below normal Wednesday, and below normal Thursday. Mainly dry weather is seen for Friday and Saturday, with temperatures averaging near to below normal Friday, and near to above normal Saturday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, tracking Monday's losses in CBOT soy futures. Analysts said China's domestic market is oversupplied with ample soybean imports, while demand for soymeal, a key ingredient in feed, remains sluggish. The benchmark September soybean contract settled RMB8 lower at RMB3,115 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Tuesday as the market, which reached its highest level in 8 1/2 years recently, succumbed to profit-taking pressure. The benchmark July contract ended MYR47 lower at MYR2,203 a metric tonne after moving between MYR2,190 and MYR2,246/tonne.