August 26, 2009

 

CBOT Soy Outlook on Wednesday: Steady, firm; tight supplies underpin

 

 

Soybean futures on the Chicago Board of Trade are poised for a steady to firmer start to Wednesday's day session, supported by tight nearby supplies.

 

CBOT soybean futures are seen opening steady to 3 cents higher.

 

"The ever increasing scramble for old crop supplies remains an underpinning theme for soybean futures, with firm cash basis levels supportive to prices," said Don Roose, president of U.S. Commodities.

 

The tightness of cash inventories is a bullish factor for prices. Also, the uncertainty of new crop potential due to its need for an extended growing season is expected to support prices.

 

However, the absence of any near-term weather threats, outside markets a little negative for commodities in early action amid a firmer U.S. dollar, and lower crude oil and equities are expected to limit advances.

 

Since the market had a poor technical performance on Tuesday and with the harvest getting under way in the southern U.S., futures have seemingly bumped up against technical resistance, said Roose.

 

A market technician said first resistance for November soybeans is seen at US$10.08 3/4 and then at Tuesday's high of US$10.16. First support is seen at Tuesday's low of US$9.88 and then at this week's low of US$9.83.

 

The T-Storm weather forecast said a round of scattered showers will roll through the eastern corn-belt Friday and Saturday as cooler weather moves southward. Unseasonably cool weather remains probable for the Midwest Saturday through Tuesday, though a widespread and damaging frost remains unlikely for most crops due to cloudiness, breezy winds and climatology, T-Storm weather said in a morning forecast.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled a tad higher Wednesday with a very thin volume traded as participants stayed on the sidelines amid a consolidation in the market. The benchmark May 2010 soybean contract settled RMB5 a metric tonne higher at RMB3,726/tonne.

 

Meanwhile, China's government sold 2% of the soybeans it offered Tuesday, as high auction prices curbed buying interest. It sold 9,600 metric tonnes of soybeans - out of the 496,800 tonnes it planned to sell - at RMB3,750/tonne, the base auction price.