October 17, 2007

 

CBOT Soy Outlook on Wednesday: Down 4-6 cents; lacks fresh supportive inputs

 

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's day session lower, as the market continues Tuesday's setback amid a lack of fresh supportive inputs.

 

CBOT soybean futures are called to start the session 4 to 6 cents lower.

 

In overnight e-CBOT trading, November soybeans were 5 1/4 cents lower at US$9.72 1/4 per bushel, and January soybeans were 6 1/4 cents lower at US$9.90 1/2.

 

The market is settling into a consolatory trend, as market bulls take a step back amid the absence of fresh supportive news to keep buyers enthused at current prices levels, analysts said.

 

Producer and commercial hedging is applying mild pressure to prices as well, with improving planting outlooks for Brazil also helping to stem bullish momentum, analysts added.

 

Meanwhile, technical factors should play a key role in the absence of fresh fundamental news, with traders watching movements in outside inflationary markets for possible near term direction, a CBOT floor analyst said.

 

A technical analyst said market bulls still have the near-term technical advantage. The next upside price objective for November soybeans is to push and close prices above major psychological resistance at US$10.00. The next downside price objective is closing prices below solid support at US$9.60.

 

First resistance for November soybeans is seen at Tuesday's high of US$9.86 and then at last week's high of US$9.93. First support is seen at Tuesday's low of US$9.75 and then at US$9.70.

 

The DTN Meteorlogix Weather Service forecast said wet or very wet weather in the western Midwest this week will cause some harvest delays and disruptions.

 

In Brazil, recent rainfall has helped improve soil moisture for planting early soybeans in Mato Grosso, however more rain is needed. The next significant chance for rainfall does not come until next Tuesday or Wednesday. This pattern bears watching as it could still be too dry and hot at times, Meteorlogix said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, as the retreat in CBOT soybean futures Tuesday triggered profit-taking. The most widely-held May 2008 soybean contract fell 1% to settle at RMB4,213 a metric tonne, after trading between RMB4,172/tonne and RMB4,235/tonne.

 

China's soy oil imports in September totaled 340,000 metric tonnes, according to preliminary data provided by the General Administration of Customs Wednesday. Total imports in January-September rose 80% on year to 1.94 million tonnes, it said, without providing the on-year change for September alone.

 

Crude palm oil futures on Malaysia's derivatives exchange fell sharply Wednesday on profit-taking, after five straight days of increases, market participants said. The benchmark January CPO contract on Bursa Malaysia Derivatives, shed the previous day's gains and ended at MYR2,714 a metric tonne, down MYR53.