August 27, 2008

 

CBOT Soy Outlook on Wednesday: Up 15-20 cents, weather, outside marktes buoy

 

 

Soybean futures on the Chicago Board of Trade are poised for a higher start to Wednesday's day session, buoyed by supportive weather outlooks and outside market influences.

 

CBOT soybean futures are called 15 to 20 cents higher.

 

In overnight electronic trading, September soybeans were 19 1/2 cents higher at US$13.57 and November soybeans were 18 1/2 cents higher at US$13.63. December soyoil was 60 points higher at 55.20 cents per pound and December soymeal was US$4.10 higher at US$371.30 per short tonne.

 

Weather remains the supportive driver of the market, as traders are reluctant to take risk premium out of the prices as the 2008 U.S. soy crop continues to face dryness and maturity issues, a CBOT floor analyst said.

 

Midwest crops need finishing rains and an extended growing season, and with those unknowns looming in the market, futures should remain underpinned, he added. However, a change a wetter weather pattern in midday forecasts could shift price direction to the downside as futures settle into a sideways range.

 

Meanwhile, a lower U.S. dollar in early market action in conjunction with firmer crude oil and precious metal futures are seen aiding the higher tone, encouraging speculative buyers to return to the market, traders said.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at this week's high of US$13.74 1/2 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$13.00.

 

First resistance for November soybeans is seen at Tuesday's high of US$13.54 1/2 and then at US$13.74 1/2. First support is seen at US$13.38 1/2 and then at US$13.25.

 

The DTN Meteorlogix weather forecast adds rain to the short-range U.S. Midwest forecast and also to the long-range forecast, especially over western and northern areas. Rain will help to ease stress to filling crops in these locations. Significant cold weather is not expected to occur during the next 10 days; however, the pattern that the U.S. model is showing Wednesday is a little more threatening than what was shown Tuesday, Meteorlogix added.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday due to gains in soymeal prices and expected higher input costs. The benchmark January 2009 soybean contract settled RMB88 higher, at RMB4,330 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 3.9% higher Wednesday on a technical rebound amid high price volatility. The benchmark November contract on the Bursa Malaysia Derivatives exchange ended MYR93 higher at MYR2,502 a metric tonne.