August 29, 2007

 

CBOT Soy Outlook on Wednesday: Down 3-4 cents; lacks fresh supportive news

 

 

Chicago Board of Trade soybean futures are expected to start Wednesday's day session on the defensive, retreating amid the absence of fresh supportive news.

 

CBOT soybean futures are called to start the session 3 to 4 cents lower.

 

In overnight e-CBOT trading, September soybeans were 4 1/4 cents lower at US$8.51, and November soybeans were 4 1/4 cents lower at US$8.68.

 

The market is poised to follow the overnight theme, with improved crop conditions and the exhaustion of buying interest in Tuesday's session setting the stage for a modest retreat in prices, analysts said.

 

A quiet news front is expected to keep technical factors in play, with the variability of the 2007 crop providing underlying support to produce a cautious atmosphere as traders take precaution heading toward an extended holiday weekend, analysts added.

 

A technical analyst said market bulls have some upside technical momentum. The next upside price objective for November soybeans is pushing prices above solid technical resistance at the August high of US$8.88. The next downside price objective is closing prices below solid support at US$8.50.

 

First resistance for November soybeans is seen at Tuesday's high of US$8.76 and then at US$8.80. First support is seen at Tuesday's low of US$8.64 1/2 and then at US$8.59.

 

The DTN Meteorlogix Weather Service forecast said the western Midwest may become drier and then warmer for several days following Tuesday night's rainfall, helping to improve conditions for maturing crops. However, there is at least some risk for wet weather to return later in the 10 day period.

 

In the Delta, hot, dry weather continues to stress late filling soybeans, especially in Arkansas and western Tennessee. Areas to the east and south have a more favorable weather pattern at this time with more showers in this section, Meteorlogix reports.

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Wednesday, supported by rising soymeal prices. The benchmark May 2008 soybean contract settled RMB6 higher at RMB3,682 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday, taking cues from weakness in Asian stock markets, a fall in soyoil prices on e-CBOT and the decline in the Dow Jones Industrial Average, market participants said. The benchmark November contract at the Bursa Malaysia Derivative exchange ended at MYR2,378/tonne, down MYR34 from the previous close, briefly touching an intra-day low of MYR2,368/tonne.