June 4, 2008

 

CBOT Soy Outlook on Wednesday: Down 2-3 cents on overnight theme, outside markets

 

 

Soybean futures on the Chicago Board of Trade are expected to start Wednesday's day session lower, in line with overnight price action, with outside markets continuing to influence direction.

 

CBOT soybean futures are called to start the session 2 to 3 cents lower. In overnight electronic trading, July soybeans were 2 1/2 cents lower at US$13.57, November soybeans were 6 3/4 cents lower at US$13.47. July soyoil was 44 points lower at 60.60 cents per pound and July soymeal was US$0.90 lower US$346.10 per short tonne.

 

With outside inflationary markets acting poorly, soybeans should drift lower with crude oil, based off the overnight theme, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Underlying market jitters attributed to Tuesday's Commodity Futures Trading Commission's new agricultural market initiatives that could limit fund buying is also expected to provide resistance to upside moves, traders said.

 

However, the market continues to react to supportive outlooks tied to the Argentina farmers strike and wet Midwest weather forecasts that could further delay plantings with 18 million to 20 million acres of soybeans still needed to be seeded, Roose added.

 

The market remains trapped in a sideways trading pattern, with fundamental support offset by outside market influences, opening up the possibility for big daily price moves, analysts said.

 

A technical analyst said 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 is to push and close prices above psychological resistance at US$14.00 a bushel.

 

First support for July soybeans is seen at Tuesday's low of US$13.46 1/2 and then at US$13.30. First resistance is seen at US$13.75 and then at this week's high of US$13.84 1/2.

 

The DTN Meteorlogix weather forecast said the U.S. Midwest weather pattern continues to feature frequent episodes of locally heavy thunderstorms. These are especially likely for the west and northern areas of the corn and soybean belt. Flooding concerns will continue. Field work delays are also quite likely, Meteorlogix reports.

 

In overseas markets, China's soyoil futures traded on the Dalian Commodity Exchange fell Wednesday on concerns that local supplies will increase with the government planning to end an export-tax sop. The benchmark September 2008 soyoil contracts settled RMB4 lower at RMB10,976 a metric tonne. The benchmark January 2009 soybean contracts rose RMB10 higher at RMB4,513/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange fell 2.55% Wednesday to their lowest levels in almost four weeks on sluggish demand in the cash market and spillover weakness from other commodities such as soyoil and crude, trade participants said. The benchmark August contract on the Bursa Malaysia Derivatives ended MYR90 lower at MYR3,440 a metric tonne.