April 21, 2009

 

CBOT Soy Outlook on Tuesday: Up 3-5 cents; Monday's losses overdone

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session higher, bouncing on ideas Monday's setback was overdone.

 

CBOT soybean futures are called to open 3 cents to 5 cents higher.

 

Underlying fundamentals remain supportive features for the market and without decisive moves in outside financial markets, futures are poised to find some stability, a CBOT floor analyst said.

 

"The outside markets despite showing some mild weakness in early action are not doing much to influence prices," he added.

 

Solid export demand and tight stocks are expected to continue buoying nearby prices, while new crop contracts maintain price strength on the need to attract enough acres to promote the rebuilding of inventories in the 2009-10 marketing year.

 

U.S. Department of Agriculture announced Tuesday, private exporters reported the sale of 180,000 metric tonnes of soybeans to China for delivery in the 2008-09 marketing year.

 

A technical analyst said no serious chart damage occurred in Monday's setback, but market bulls do appear to have become exhausted at higher price levels and need to show fresh power soon.

 

The next upside price objective for July soybeans is to push and close prices above solid technical resistance at last week's high of US$10.64 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.80 a bushel.

 

CBOT soy product futures are seen higher, in line with overnight price strength.

 

Meanwhile, U.S. exports of soyoil to India have spiked since the country eliminated a 20% import tariff in March, but the surge in trade may also be attributed to reduced competition from Argentina and may only be temporary, the president of the National Oilseed Processors Association said Monday.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Tuesday, following sharp losses in CBOT contracts, crude oil futures and U.S. stocks. Crude palm oil futures on Malaysia's derivatives exchange fell Tuesday pressured by weak global vegetable oil prices, but tight palm oil stocks capped losses to a minimum, trade participants said.