October 28, 2009

 

CBOT Soy Outlook on Wednesday: Lower, harvest pressure, weak outside markets

 

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's day session on the defensive, as harvest pressure and weak outside market influences weigh on prices.

 

CBOT soybean futures are seen starting 9 to 11 cents lower. In overnight trade, Nov soybeans were 11 cents lower at US$9.62 1/2, and Jan soybeans were 10 3/4 cents lower at US$9.65 3/4.

 

"The outside markets are a little negative for commodities and with the trade looking forward to a harvest window for U.S. farmers next week, the market is taking a defensive stance" said Victor Lespinasse, analyst with Grainanalyst.com.

 

Traders expect harvest activity to ramp up on clearer and drier weather, using the 41 percentage point jump in Ohio harvesting as an example of how quick farmers can cut crops with a window of opportunity.

 

The absence of any other fresh fundamental news will keep attention on weather updates and movement in the U.S. dollar for clues to near term direction. In early trade, the U.S. dollar index is higher and crude oil, gold and silver futures are tracking lower.

 

Meanwhile, light fundamental support is seen from heavy rains poised to push through the central U.S. Thursday and Friday.

 

A technical analyst said the next downside price objective for Nov soybeans is pushing and closing prices below solid technical support at US$9.50 a bushel. First resistance for Nov soybeans is seen at US$9.80 and then at Tuesday's high of US$9.93 1/2. First support is seen at Tuesday's low of US$9.69 1/4 and then at US$9.60.

 

The T-storm Weather forecast said soybean harvesting will stop through Friday due to widespread rains across the central U.S. Field flooding, possibly widespread will affect crops in the Delta Thursday and Friday.

 

Needed drying will begin across the region during the weekend and generally continues through at least the following next weekend, T-storm Weather said in a morning forecast. Seasonable mildness will accompany dryness to accelerate drying and harvesting rates.

 

First notice day for November soybean futures is Friday, October 30.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, as broad losses in Asian equities markets triggered profit-taking. The September 2010 soybean contract settled RMB22 a metric tonne lower at RMB3,683/tonne.

Crude palm oil futures on Malaysia's derivatives exchange fell for the third day Wednesday, tumbling as much as 1.3% on selling pressure amid weakness across commodity markets, including soyoil and crude, trade participants said. The benchmark January contract on the Bursa Malaysia Derivatives ended down MYR18 at MYR2,152 a metric tonne.