May 21, 2008

 

CBOT Soy Outlook on Wednesday: Up 10-12 cents, outside markets, uncertainties buoy

 

 

Soybean futures on the Chicago Board of Trade are expected to begin Wednesday's day session firmly underpinned, buoyed by lingering uncertainty surrounding the Argentine strike situation and the bullish influence outside inflationary markets.

 

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$13.46, November soybeans were 12 1/4 cents higher at US$13.38. July soyoil was 56 points higher at 61.59 cents per pound and July soymeal was US$2.80 higher US$336.30 per short tonne.

 

The uncertainty of the Argentine strike situation has slowed world importer confidence in buying Argentina supplies and that remains a supportive feature, as traders expect buyers to look for alternatives until the strike issues are completely resolved, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Spillover support from higher crude oil, gold and silver futures as well as a weaker U.S. dollar is seen aiding the higher tone, as inflationary concerns accelerate buying in commodities, analysts said.

 

Meanwhile, technical chart patterns remain positive for prices, and with a cooler 6-10 day weather forecast for the Midwest that could slow crop development, traders are poised to keep premium in prices, analysts added.

 

However, if energy values change or there is an announcement that the Argentina strike is officially over, that could be a big negative for prices, Roose added.

 

A technical analyst said the next downside price objective for the bears is pushing and closing prices below solid technical support at US$13.00. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at US$13.66 a bushel, which would fill on the upside Monday's downside price gap on the daily chart.

 

First support for July soybeans is seen at Tuesday's low of US$13.30 and then at this week's low of US$13.22. First resistance is seen at US$13.50 and then at Tuesday's high of US$13.62.

 

In overseas markets, China soybean futures traded on the Dalian Commodity Exchange settled slightly higher Wednesday, supported by rising freight fees. The benchmark January 2009 soybean contract rose RMB4, or 0.1%, to RMB4,457 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended little changed in thin trade Wednesday, swinging both ways as investors scouted for fresh leads, traders said. The benchmark August CPO contract on Bursa Malaysia Derivatives ended MYR3 higher at MYR3,557 a metric tonne, recovering from an intraday low of MYR3,525/tonne.