July 15, 2009
CBOT Soy Outlook on Wednesday: Outside market support, china demand buoy soy
Supportive outside financial market influences and fresh export demand are expected to buoy Chicago Board of Trade soybean futures Wednesday.
CBOT soybean futures are seen opening 7 cents to 9 cents higher.
The firm overnight theme coupled with a weaker U.S. dollar, higher crude oil and equity prices have soybeans poised to move higher in early action, said a CBOT floor broker.
Continued export demand from China is another feature seen underpinning soybeans in the near term.
The trade will keep an eye on outside markets, but favorable near term weather for developing soybean crops in the central U.S. is expected to keep a lid on upside movement.
Nevertheless, the market has seemingly found a level that provides value to soybean futures, with end users starting to step up buying interest, limiting downside pressure as well, traders said.
U.S. Department of Agriculture on Wednesday announced private export sales of 113,000 metric tonnes of soybeans for delivery to China in the 2008-09 marketing year.
A market technician said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at US$9.75 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$8.81 1/4 a bushel.
The DTN Meteorlogix weather forecast said the U.S. Midwest has a mostly favorable weather pattern for developing soybeans. Hot temperatures, if any, will be brief and mainly confined to western and southern areas.
In the Delta, cooler weather and increasing shower activity are on tap for the next few days. Crops are under some stress due to dryness and hot temperatures, but this stressful weather looks to be coming to an end, Meteorlogix forecast.
In overseas markets, soybean futures on the Dalian Commodity Exchange settled higher Wednesday, in line with a technical rebound overnight on CBOT. The most actively traded January 2010 soybean contract settled RMB22 a metric tonne higher at RMB3,543/tonne.
