November 12, 2009

 

CBOT Soy Outlook on Tuesday: Lower; follow overnight theme on firm dollar

 

 

Soybean futures at the Chicago Board of Trade are expected to start Thursday's day session lower, pressured by strength in the U.S. dollar and bearish signals from overnight action.

 

CBOT soybean futures are seen starting 7 cents to 9 cents lower. In overnight trade, Nov soybeans were 8 3/4 cents lower at US$9.55, and Jan soybeans were 7 3/4 cents lower at US$9.64 1/4.

 

Profit taking pressure from recent gains is seen weighing on prices, with a higher U.S. dollar index, and lower crude oil and metal futures serving as catalysts to attract speculative sellers, analysts said.

 

The absence of fresh fundamental news is keeping attention on outside markets, with movement in the U.S. dollar and its impact on fund activity key drivers of price direction.

 

Traders said lingering concerns about field losses, as rains return to the Midwest next week, and the progress of South American plantings and early development is seen providing underlying support. However, support from U.S. weather is seen limited, as the U.S. soybean harvest is nearing completion following favorable harvest weather during the past week.

 

Technically inspired activity is seen as a feature, with traders eyeing the market's ability to generate follow through buying or selling as prices challenge chart support and resistance levels.

 

A technical analyst said first resistance for January soybeans is seen at US$9.80 and then at Wednesday's high of US$9.86 1/2. First support is seen at Wednesday's low of US$9.64 and then at US$9.60.

 

The DTN Meteorlogix weather forecast said showers and warm temperatures favor early growth of Brazilian crops while causing a few planting delays. In Argentina, the weather pattern continues to look more active for minor northern Argentina growing areas during the weekend and through much of next week. The major growing belt from Cordoba and southern Sante Fe to northern Buenos Aires may see a few showers from time to time. The southern crop areas in La Pampa and southwest Buenos Aires continue to look drier, Meteorlogix said.

 

The U.S. Department of Agriculture's weekly export sales report, normally released Thursday, will be delayed until Friday due to the Veterans Day holiday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled slightly higher Thursday, following gains on CBOT Wednesday. The benchmark September 2010 soybean contract settled RMB13 a metric tonne higher at RMB3,730/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher on short covering as heavy rains in oil palm growing states may disrupt harvesting activities, trade participants said. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR10 higher at MYR2,245 a metric tonne.