November 4, 2009

 

CBOT Soy Outlook on Wednesday: Higher on dollar, technical strength

 

 

Chicago Board of Trade soybeans are expected to open higher Wednesday amid continued support from outside markets and technical strength, traders said.

 

Soybeans are called 6 cents to 8 cents higher. In overnight trade, November soybeans were up 8 1/4 cents to US$10.15 per bushel and January soybeans were up 8 1/4 cents to US$10.18 3/4.

 

Outside markets are setting a bullish tone, traders and analysts said, with a weaker dollar expected to steer more money into corn and other commodities. Fundamentals are taking a backseat as funds have poured in, traders said.

 

"We think we still have the tailwind from commodity buying," an analyst said.

 

The trade is looking ahead to two private firms' estimates for the crop--one to be released during morning trade, the other after the market closes.

 

The weather is seen by many as bearish. DTN Meteorlogix is calling for mostly dry conditions in the U.S. corn belt through Sunday, and analysts said that while some rain is expected later next week, forecasts Wednesday are a little drier than they were a day ago.

 

The analyst said that while the near-term forecast is clearly bearish, there remains a "tremendous" amount of soybeans in the field, and the market doesn't know how to handle the potential for rains next week.

 

The next upside technical objective for the bulls is pushing and closing January prices above solid technical resistance at the October high of US$10.29 1/4 a bushel, a technical analyst said. The next downside price objective for the bears is pushing and closing prices below solid technical support at last week's low of US$9.62 a bushel.

 

First resistance for January soybeans is seen at Tuesday's high of US$10.21 and then at US$10.29 1/4. First support is seen at US$10.00 and then at Tuesday's low of US$9.87 1/4.

 

In other markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on the Chicago Board of Trade's gains overnight, with the market continuing to consolidate in the absence of clear trading guidance.

 

The benchmark September 2010 soybean contract settled RMB5 higher at RMB3,739 a metric tonne, up 0.1%.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Wednesday, tracking stronger crude oil futures, said trade participants.

 

The benchmark January contract on the Bursa Malaysia Derivatives ended MYR70 higher at MYR2,260 a metric tonne, after trading in a range of MYR2,207/tonne-MYR2,273/tonne.