June 16, 2009

 

CBOT Soy Outlook on Tuesday: Seen higher on supportive outside markets

 

 

Soybean futures at the Chicago Board of Trade are set to start Tuesday's day session higher, rebounding from a two-day slide on supportive outside market influences.

 

CBOT soybean futures are seen opening 10 cents to 15 cents higher.

 

The key outside markets are expected to provide support to prices, with weakness in the U.S. dollar, higher crude oil and equities attracting speculative buying, analysts said.

 

Technical buying is seen as a feature as well, with analysts saying sharp declines absorbed in the past two trading days had left futures a little oversold on a short term basis, a CBOT floor broker said.

 

Lingering concerns about tight old crop inventories and planting delays in parts of the Midwest are expected to provide light strength to prices as well.

 

However, in the absence of fresh fundamental news, the market will remain sensitive to outside market factors, with movements in the U.S. dollar a key influence on price direction, a CBOT floor broker said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above major psychological resistance at US$13.00 a bushel. The next downside price objective is pushing and closing prices below solid support at US$11.50 a bushel.

 

Meanwhile, U.S. soybeans are 87% planted as of Sunday, up from 78% the prior week, U.S. Department of Agriculture reported Monday. Plantings fell within the expectations of traders, who saw the crop 85% to 90% planted.

 

Illinois, Indiana, Missouri and Arkansas were all at least 14 percentage points behind the five-year average for plantings.

 

On the crop's first condition ratings of the season, the USDA said 66% of the crop was rated good-to-excellent, up from 56% at the same time last year. The USDA said 72% of the crop was emerged, up from 55% the previous week but below the five-year average of 83%.

 

DTN Meteorlogix said episodes of scattered thunderstorms and warmer temperatures in the U.S. Midwest favors developing crops while delaying final planting efforts.

 

In other news, China's soybean imports in the 2009-10 crop year ending in September are likely to fall 7.5% to 37 million metric tonnes, a government think tank said Tuesday. The 3 million-tonne decline in imports is expected in part because of increased government stockpiling of domestic soybeans in the current crop year, the China National Grain and Oils Information Center said in a report.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, tracking CBOT's tumble Monday. The benchmark January 2010 soybean contract settled 0.1% lower at RMB3,645 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday, tracking stronger soyoil and crude oil futures in Asian trading hours, trade participants said. The benchmark September CPO contract on the Bursa Malaysia Derivatives ended MYR11 higher at MYR2,400 a metric tonne.