September 8, 2009
CBOT Soy Outlook on Tuesday: Outside markets to support firm start
Supportive outside market influences have Chicago Board of Trade soybean futures poised for a firm start amid a quiet fundamental news front.
CBOT soybean futures are seen opening 10 cents to 15 cents higher.
The strength of crude oil, metals, world equities and weakness in the U.S. dollar index should provide broad-based support to the market, analysts said.
Oversold market conditions following an 8.8% drop in value in the previous week is expected to attract some technical buying and short covering. Trader sentiment that favorable weather conditions and record crop potential was factored into prices previously, opens the door for a modest bounce, analysts said.
The outside markets provide a needed spark to encourage some position evening after recent declines, particularly heading toward Friday's crop report in a holiday-shortened trading week, a CBOT floor analyst said.
However, record crop potential in the absence of a near-term weather threat for Midwest crops remains a feature that will continue to limit upside potential.
A technical analyst said first resistance for November soybeans is seen at Friday's high of US$9.44 and then at US$9.50. First support is seen at Friday's low of US$9.20 1/2 and then at US$9.10.
The DTN Meteorlogix weather forecast said crops in the Midwest region will continue to benefit from near- to above-normal temperatures for at least the next seven days and probably the next 10 days. Filling crops would also benefit from rains during this period.
On tap for Tuesday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT. USDA will release its September crop production and supply/demand reports Friday at 8:30 am EDT.
CBOT September soyoil deliveries totaled 1,856 lots. Customer accounts at Man Professional Clearing issued 1,235 lots, while stopping 1,035 lots. The house account at Term Commodities issued 104 lots. The last trade date assigned was Sept. 4.
In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Tuesday in a technical rebound from recent losses. The benchmark May 2010 soybean contract settled RMB17 a metric tonne higher at RMB3,574/tonne.
