April 22, 2008

 

CBOT Soy Outlook on Tuesday: Up 10-12 cents; losses overdone, outside markets

 

 

Soybean futures on the Chicago Board of Trade are expected begin Tuesday's day session higher, bouncing back from Monday's declines with supportive outside influences aiding the gains, analysts said.

 

CBOT soybean futures are called to start the session 10 to 12 cents higher.

 

In overnight electronic trading, July soybeans were 14 1/2 cents higher at US$13.45, November soybeans were 9 1/4 cents higher at US$12.44 3/4. July soyoil was 68 points higher at 60.40 cents per pound and July soymeal was US$3.10 higher US$344.40 per short tonne.

 

"Its looks like the market overreacted to the downside Monday, and with the U.S. dollar lower and solid underlying demand, futures are poised to extended the higher overnight theme," a CBOT floor analyst said.

 

The daily bullish influence of record high crude oil futures, and higher gold and silver futures are supportive features aiding the technical recovery from Monday's losses, analysts added. Higher Chinese soybeans overnight are expected to aid the early bullish psychology in the market, a trader said.

 

Meanwhile, rumors that the lack of progress in negotiations with the Argentine government and farmers could lead to a resumption of a farmers strike in Argentina next week are seen supporting futures as well, traders said.

 

A technical analyst said some near-term technical damage was inflicted Monday and market bears gained some fresh downside technical momentum. The next downside price objective for July soybeans is pushing and closing prices below psychological support at US$13.00. The next upside price objective for is to push and close prices above solid technical resistance at last week's high of US$14.15 a bushel.

 

First resistance for July soybeans is seen at Monday's high of US$13.55 and then at US$13.72. First support is seen at Monday's low of US$13.07 and then at US$13.00.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Tuesday on short-covering. The benchmark January 2009 soybean contract settled up RMB23 at RMB4,141 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday after trading both ways amid speculative selling, a strong ringgit against the U.S. dollar, fluctuating cues from soyoil and lower open interest, trade participants said. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR19 lower at MYR3,440 a metric tonne after trading in a wide range between MYR3,385 and MYR3,507/tonne.