July 25, 2007

 

CBOT Soy Outlook on Wednesday: Up 2-4 cents; continuing consolidative theme

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session on firmer footing, in tune with the overnight theme as the market continues its consolidation from recent losses, analysts said.

 

CBOT soybean futures are called to start the session 2 to 4 cents higher.

 

In overnight e-CBOT trading, August soybeans were 3 3/4 cents higher at US$8.24 per bushel, and November was 3 cents higher at US$8.48 1/2.

 

A quiet news front is expected to promote a sideways trend, as the market searches for direction and stages a minor correction from prior declines, a CBOT floor analyst said.

 

Otherwise, traders are expected to keep a close eye on weather forecasts, as yield potential remains uncertain amid tightening supply projections for the next marketing year, he added.

 

Meanwhile, a technical analyst said serious near-term chart damage has been inflicted in soybeans to suggest a major market top is in place. The next downside price objective for November soybeans is closing prices below solid support at this week's low of US$8.34. The next upside price objective is closing prices above solid technical resistance at US$8.69 1/2, which would fill on the upside this week's downside price gap on the daily bar chart.

 

First resistance for November soybeans is seen at Tuesday's high of US$8.53 and then at US$8.60. First support is seen at Tuesday's low of US$8.38 1/2 and then at US$8.34.

 

The DTN Meteorlogix Weather Service forecast said there is a slight chance for isolated afternoon thundershowers in the western Midwest Wednesday. Dry conditions are on tap for Thursday. Scattered showers and thundershowers are seen for Thursday night and Friday. Temperatures will average above normal Wednesday and Thursday with highs reaching the low or middle 90s Fahrenheit Thursday, with cooler temperatures seen for Friday.

 

In the eastern Midwest, there is a chance for a few afternoon thundershowers through eastern Indiana and in Ohio Wednesday and Thursday, with dry conditions seen elsewhere in the region during these days. Scattered showers and thundershowers are expected Friday. Temperatures will average near to below normal Wednesday, near to above normal in western areas and near to below normal east Thursday, and near to below normal Friday, Meteorlogix reports.

 

In overseas markets, crude palm oil futures on Malaysia's Derivatives Exchange ended slightly lower Wednesday following confusion over Indian import duties. The benchmark October contract on Bursa Malaysia Derivatives ended at MYR2,521 a metric tonne, down MYR4 from Tuesday.

 

After announcing a 5 percentage point cut in the import duty on CPO to 45% Monday, India issued a statement Tuesday saying the duty was cut to 40%. On Wednesday, the duty was revised back to 45%. In Singapore's Joint Asian Derivatives Exchange, traded volume remained thin at 31 lots. At 1000 GMT, the October contract was up US$8 at US$747.00/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, helped by high soyoil prices. The benchmark January 2008 soybean contract settled RMB13 higher at RMB3,281 a metric tonne.