July 29, 2009

 

CBOT Soy Outlook on Wednesday: Lower; outside markets, lack of fresh support

 

 

Soybean futures on the Chicago Board of Trade are poised for a lower start to Wednesday's day session, under pressure from outside financial markets amid a lack of fresh supportive news.

 

CBOT soybean futures are seen opening 8 cents to 10 cents lower.

 

CBOT soybean prices were lower overnight. August dropped 13 cents a bushel to US$10.41 1/2 and November lost 9 cents to US$9.18.

 

The combination of bearish outside market influences, favorable near term weather conditions for Midwest crops and carryover pressure from overnight action sets the stage for early price pressure, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

The U.S. dollar index is higher, crude oil futures are lower and world equity markets are on the defensive in early action.

 

A quiet news front is keeping attention on weather and macro markets, with technical factors key as well, with traders looking to square up some positions at months end.

 

Traders anticipate futures will remain in a sideways trading range, with tight old crop supplies, solid demand and new crop uncertainties lingering until the crop makes it through its critical August development period limiting downside risks.

 

A market technician said first resistance for November soybeans is seen at Tuesday's high of US$9.32 1/2 and then at US$9.40. First support is seen at US$9.20 and then at Tuesday's low of US$9.06.

 

DTN Meteorlogix said cool or very cool temperatures will continue to slow development of crops at least during the next 5 days and possibly longer in the U.S. Midwest. Showers are in the picture as well, although coverage with these showers vary somewhat.

 

In other news, China's government failed to sell soybeans from its reserves again Wednesday, as the base auction price was set too high. The government planned to sell 502,700 metric tonnes of soybeans to north and northeast major producing areas, but high prices curbed bidding interest.

 

Meanwhile, China's soybean imports in July will likely set a new record high of 4.82 million metric tonnes, according to a report by the Ministry of Commerce issued Wednesday. China imported 4.71 million tonnes of soybeans in June, up 31% compared with last June - and the highest recorded volume for a single month.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on tight supply. The benchmark May 2010 soybean contract settled RMB14 a metric tonne higher at RMB3,528/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday in choppy trade, tracking declines in regional stock markets while weak crude oil and soyoil added more downward pressure, trade participants said. The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR27 lower at MYR2,113 a metric tonne.