October 13, 2009

 

CBOT Soy Outlook on Tuesday: Higher; dollar weakness, harvest woes underpin

 

 

Chicago Board of Trade soybean futures are expected to start Tuesday's day session on firm footing, continuing the recent ascent on supportive outside markets and lingering harvest woes.

 

CBOT soybean futures are seen starting 6 to 8 cents higher. In overnight trade, Nov soybeans were 7 1/4 cents higher at US$10.06 1/4.

 

Weakness in the U.S. dollar remains a bullish feature, producing broad-based strength in commodity markets, analysts said. In early trading, crude oil futures, and gold and silver futures are posting higher prices.

 

Lingering harvest delays are the fundamental catalyst for upward movement, with wet, cold conditions slowing the movement of new crop supplies into the cash pipeline. End users continue to scramble for new supplies, with the heavy rains in southern areas stalling export shipments as well as raising disease issues for crops in the U.S. Delta, a CBOT floor analyst said.

 

Technical buying is another bullish piece to the supportive outlook for Tuesday, with upward momentum taking off as speculative money flow moves into the CBOT grain and oilseed complex recently.

 

A technical analyst said first resistance for November soybeans is seen at US$10.00 and then at US$10.20. First support is seen at US$9.90 and then at US$9.80.

 

The DTN Meteorlogix weather forecast said additional freezing temperatures will mainly occur in the western and northern Midwest growing areas. This may damage immature crops that may have escaped damage from the weekend freeze. A wet weather pattern will continue to delay Midwest field work, although the short range rains are not as heavy as they have been.

 

In the Delta, episodes of rain and cool weather will continue to delay the crop harvests for the next few days, Meteorlogix said.

 

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.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled slightly higher Tuesday, supported by sharp gains at CBOT Monday. The benchmark May 2010 soybean contract settled 0.3% higher at RMB3,685 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Tuesday in volatile trade, spurred by speculative interest, market participants said. The benchmark December contract on Bursa Malaysia Derivatives closed MYR10 up at MYR2,157 a metric tonne.