October 9, 2007

 

CBOT Soy Outlook on Tuesday: Up 7-9 cents; e-CBOT, Brazil planting woes

 

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's day session on firm footing, taking its cue from overnight action and lingering concerns over dryness issues in northern Brazil.

 

CBOT soybean futures are called to start the session 7 to 9 cents higher.

 

In overnight e-CBOT trading, November soybeans were 9 cents higher at US$9.34 1/2, and January soybeans were 10 1/4 cents higher at US$9.52 1/4.

 

The overnight trend points to a higher start, with planting issues in northern Brazil due to dryness an underpinning feature, analysts said.

 

A mild technical recovering from Monday's slide to four-week lows is expected to lend support as is overnight price strength in Malaysian palm oil futures, which should bolster upward movement in soyoil futures, analysts added.

 

However, trade positioning ahead of Friday's crop estimates coupled with favorable yield reports from the U.S. harvest is seen applying light pressure to limit upside movement, a CBOT floor analyst added.

 

A technical analyst said Monday's price action saw a bearish downside breakout from a bear flag pattern on the daily bar chart. Some near-term chart damage has been inflicted recently, including more Monday, to suggest still more downside price potential in the near term. The next upside price objective for November soybeans is to push prices above solid resistance at US$9.50. The next downside price objective is closing prices below psychological support at US$9.00.

 

First resistance for November soybeans is seen at Monday's high of US$9.37 3/4 and then at US$9.50. First support is seen at Monday's low of US$9.23 and then at US$9.05 and then at US$9.00.

 

The DTN Meteorlogix Weather Service forecast said wet conditions in the western Midwest should improve during the coming days under mostly fair skies. There are no significant harvest concerns outside of this area.

 

In Brazil, very hot, mostly dry, weather continues during the next few days. There is some chance for a few thunderstorms Friday into the weekend. Rainfall is needed to break the heat and to improve soil moisture for any early soybean planting in the northern belt, Meteorlogix reports.

 

On tap for Tuesday, USDA is scheduled to release its weekly export inspections report at 11:00 a.m. EDT and weekly crop progress reports at 4:00 p.m. EDT.

 

October soyoil deliveries totaled 2,178 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 1,068 and 767 lots respectively. The last trade date assigned was October 8.

 

October soymeal deliveries totaled 1,364 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 713 and 486 lots respectively. The last trade date assigned was October 8.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Tuesday on strong cash prices for the new crop. The benchmark May 2008 soybean contract settled RMB9 higher at RMB4,085 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended sharply higher Tuesday, recovering from morning losses on support from strong buying interest and a healthy outlook for exports, market participants said. The benchmark December contract at the Bursa Malaysia Derivatives ended MYR50 higher at an intraday high of MYR2,592/tonne.