October 14, 2008

     

CBOT Soy Outlook on Tuesday: Poised to climb on outside market support

 

 

The supportive influence of outside markets have Chicago Board of Trade soybean futures poised to start Tuesday's day session on firm footing.

 

The market is set to follow the overnight theme, with carryover momentum from Monday's advances amid signs of stability in financial markets providing some optimism to pull buyers off the sidelines, analysts said.

 

In overnight electronic trading, November soybeans were 22 cents higher at US$9.50. December soyoil was 39 points higher at 39.60 cents per pound and December soymeal was US$7.90 higher at US$264.60 per short tonne.

 

A weaker U.S. dollar, higher crude oil and metal futures in early market action are providing support for a higher resumption of day session trading, analysts added.

 

Fundamental news is rather quiet, keeping traders focused on outside market factors. However, lingering global economic uncertainty is expected to cap upside potential until investor confidence is restored.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above major psychological resistance at US$10.00 a bushel. The next downside price objective is pushing and closing prices below major solid technical support at Monday's low of US$8.81 1/2.

 

First resistance for November soybeans is seen at Monday's high of US$9.38 3/4 and then at US$9.50. First support is seen at US$9.11 and then at US$9.00.

 

The National Oilseed Processors Association says 120.376 million bushels of soybeans were crushed in September, down from 121.681 million in August and below the average analyst estimate of 122 million. The range of pre-report estimates was 121 million to 123 million. Soyoil stocks were pegged at 1.988 billion pounds, down from 2.152 billion, but above the average analyst estimate of 1.979 billion. The range of estimates was 1.927 billion pounds to 2.050 billion pounds.

 

The DTN Meteorlogix weather forecast said rains through the far west and northwest areas of the U.S. Midwest will likely slow harvest progress in these locations early this week. Otherwise there are no significant concerns for maturing crops and harvests elsewhere in the region.

 

U.S. Department of Agriculture is scheduled to release its weekly export inspections report Tuesday at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.

 

In deliveries, Oct soymeal deliveries totaled 124 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 10.

 

Oct soyoil deliveries totaled 370 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was October 13.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Tuesday, taking cues from strength in other commodities and equity markets. The benchmark January 2009 soybean contract settled RMB107 higher at RMB3,390/tonne, or 3.3%.

 

Crude palm oil futures on Malaysia's derivatives exchange mostly rose Tuesday but ended off highs on expectations of significantly lower half-month export numbers, said trade participants. The benchmark December contract on Bursa Malaysia Derivatives ended MYR15 higher at MYR1,850 a metric tonne.