November 11, 2009

 

CBOT Soy Outlook on Wednesday: Seen up, following overnight theme, outside support

 

 

Chicago Board of Trade soybean futures are poised for a higher start to Wednesday's day session, buoyed by a supportive overnight theme and outside financial market influences.

 

CBOT soybean futures are seen starting 6 to 8 cents higher. In overnight trade, November soybeans were 5 3/4 cents higher at US$9.67 1/4, and January soybeans were 6 1/4 cents higher at US$9.74 1/4.

 

In the absence of any fresh news to direct prices, a weaker U.S. dollar, higher crude oil, record-high gold prices and firm equity futures are seen providing outside support to attract speculative buyers, analysts said.

 

Technically inspired buying is expected to aide the advances, with bullish traders encouraged by the market's ability to settle above major moving-average chart support levels in the face of bearish production data Tuesday.

 

The higher theme is in place based on overnight trade, but as the day unfolds, direction could shift as traders watch for new developments in weather, the U.S. dollar and speculative fund activity, said Victor Lespinasse, analyst with GrainAnalyst.com.

 

A technical analyst said first resistance for January soybeans is seen at Tuesday's high of US$9.75 and then at US$9.80. First support is seen at US$9.62 and then at this week's low of US$9.50.

 

The DTN/Meteorlogix weather forecast said Midwest conditions will favor harvesting of soybeans through Sunday. However, the weather early next week looks wetter, especially in the south and eastern areas.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled little changed Wednesday, ending a rather choppy day as the U.S. Department of Agriculture's bearish report was digested. The benchmark September 2010 soybean contract settled RMB1 per metric tonne higher at RMB3,717 a tonne.

 

China imported 2.52 million metric tonnes of soybeans in October, preliminary data from the General Administration of Customs showed Wednesday. In the year to date, total imports rose 13.2% to 34.88 million tonnes, the customs department said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday in thin trade as news of bearish output and stock levels continued to weigh on prices, said trade participants. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR7 lower at MYR2,235 a metric tonne.