April 30, 2008

 

CBOT Soy Outlook on Wednesday: Seen up 5-10 cents; following overnight theme

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session on firm footing, taking its cue from overnight price action, analysts said.

 

CBOT soybean futures are called to start the session 5 to 10 cents higher.

 

In overnight electronic trading, July soybeans were 9 cents higher at US$13.02 1/2, November soybeans were 8 1/4 cents higher at US$12.08 3/4. July soyoil was 26 points higher at 58.08 cents per pound and July soymeal was US$4.40 higher US$337.40 per short tonne.

 

A quiet news front will promote consolidative action following recent declines, with end-of-the-month position squaring, uncertainties associated with the proposed resumption of the Argentine strike and acreage concerns underpinning prices, analysts added.

 

Cautious trading is expected as well, with traders looking ahead to the U.S. Federal Reserves decision on short term interest rates this afternoon. The Feds decision could impact the value of the U.S. dollar, a CBOT floor analyst said.

 

Firmer crude oil, palm oil and Chinese soybean futures overnight are seen lending support to prices as well, traders said. New crop soybeans are expected to garner support from planting opportunities for corn next week, and reports of a shortage of quality soybean seeds that will limit farmers switching corn acres to soybeans, analysts added.

 

The December corn/November soybean spread ratio trading below the 2-to-1 level is seen as an economic incentive for farmers to plant corn, a CBOT floor trader said.

 

A technical analyst said near-term chart damage has been inflicted this week. The next downside price objective for July soybeans is pushing and closing prices below solid technical support at US$12.50. The next upside price objective is to push and close prices above solid technical resistance at this week's high of US$13.57 a bushel.

 

First resistance for July soybeans is seen at Tuesday's high of US$13.02 and then at US$13.07. First support is seen at Tuesday's low of US$12.80 and then at US$12.65.

 

In deliveries, May soybean deliveries totaled 721 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Bank of America Securities and UBS Securities issuers of 264 and 450 lots respectively. Stoppers were scattered among various commission houses. The last trade date assigned was April 3.

 

In other news, India's soybean production in the coming season, sowing for which will start in July, could rise above 10 million metric tonnes as remunerative returns last year have led to increased farmer interest in the commodity, a senior industry official said Wednesday. For the current crop year ending June, the country's federal government has projected record output of 9.43 million tonnes.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled mostly slightly higher Wednesday due to limited old crop stocks. The benchmark January 2009 soybean contract settled RMB10 higher at RMB4,054 a metric tonne, or up 0.25%, after trading between RMB4,030 and RMB4,077/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 1.4% higher Wednesday on a rise in Malaysia's exports to a four-month high but failed to stay above MYR3,400 a metric tonne as skepticism remained on shipments overseas, said trade participants. The benchmark July contract on Bursa Malaysia Derivatives ended MYR46 higher at MYR3,395/tonne, off an intraday high of MYR3,412.