April 29, 2009

 

CBOT Soy Outlook on Wednesday: Higher; outside markets seen underpinning

 

 

Chicago Board of Trade soybean futures are expected to open Wednesday's day session higher, buoyed by strength in outside markets and ideas recent declines were overdone.

 

CBOT soybean futures are called to open 10 cent to 13 cents higher.

 

Stability on outside markets are providing a boost for futures prices, with higher stock indexes, crude oil and precious metals taking some pressure off prices, analysts said.

 

The market has factored in the recent influx of bearish news and overdue to find some strength in the absence of any new developments to weigh on prices, analysts added.

 

However, traders said there is potential for choppy action, with lingering fears of swine flu curtailing global feed demand, reports of China canceling previously bought U.S. soybean supplies and wet conditions delaying corn seedings applying pressure.

 

Meanwhile, if market talk that Chinese importers have cancelled several recent U.S. soybean import shipments proves true, the cancellations were probably be due to panic over swine flu and not indicative of any trend, analysts said Wednesday.

 

Chinese crush margins are down following the heavy buildup of soybean imports in China, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

The unwinding of some bull spreads ahead of Thursday's first notice day is seen supporting deferred months despite wet Midwest conditions potentially shift some corn acres to soybeans.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at US$10.40 a bushel. The next downside price objective is pushing and closing prices below solid chart support at US$9.50 a bushel.

 

The DTN Meteorlogix weather forecast said rains and wet weather over the southern and eastern Midwest region will keep planting progress slow this week. Showers and some rain may slow down planting efforts through the northwest Midwest as well.

 

In demand news, private exporters reported to the U.S. Department of Agriculture export sales of 100,000 metric tonnes of soybeans for delivery to unknown destinations during the 2009-2010 marketing year, the USDA said Wednesday.

 

CBOT soy product futures are seen higher, in unison with soybeans.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on short-covering, as swine flu concerns eased. Crude palm oil futures on Malaysia's derivatives exchange ended higher Wednesday in volatile trade, recovering from intraday losses on expectations of steady exports this month of almost 1.20 million metric tonnes.