July 8, 2009

 

CBOT Soy Outlook on Wednesday: Seen mixed; conflicting market influences

 

 

Soybean futures on the Chicago Board of Trade are poised for a mixed start to Wednesday's day session, searching for direction amid conflicting market influences.

 

CBOT soybean futures are seen opening mixed.

 

The market is set to battle offsetting influences, with oversold conditions and tight old crop supplies generating support, while bearish weather forecasts, lower outside markets and technical weakness applies pressure, said U.S. Commodities' Jason Roose.

 

The near-term theme remains defensive, as positioning ahead of Friday's crop report, improved weather for crops and long liquidation remain bearish factors influencing prices. Nevertheless, a tight supply scenario, underlying demand and the uncertainty of a long growing season provides strength to underpin prices, analysts said.

 

Meanwhile, demand remains a bullish feature, with traders anticipating the sharp decline in prices will uncover fresh buying.

 

The U.S. Department of Agriculture on Wednesday announced private export sales of 180,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

A technical analyst said first resistance for November soybeans is seen at US$9.00 and then at US$9.15. First support is seen at Tuesday's low of US$8.93 and then at US$8.75.

 

The DTN Meteorlogix weather forecast said there are still no significant concerns for crops in the Midwest during the next 10 days. A ridge will approach and bring a short period of hot temperatures with it, but then the ridge backs off again.

 

In the Delta, drier and somewhat hotter temperatures during the next 5-7 days should again deplete available soil moisture for crops. However, it does not look to be as hot as it was last week, Meteorlogix forecasts.

 

In deliveries, July soyoil deliveries totaled 2,446 lots. Customer accounts at Man Professional Clearing issued 1,561 lots, while stopping 1,338 lots. The last trade date assigned was July 7.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply lower Wednesday, following Tuesday's tumble at CBOT. The most actively traded January 2010 soybean contract settled RMB102 a metric tonne lower at RMB3,519/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended sharply lower Wednesday, led by falls in regional equities and crude oil due to concerns about prospects for global economic recovery, trade participants said. The benchmark September CPO contract on the Bursa Malaysia Derivatives ended MYR67 lower at MYR2,002 a metric tonne.