November 13, 2007

 

CBOT Soy Outlook on Tuesday: Up 10-12 cents on weak dollar, e-CBOT, China

 

 

Chicago Board of Trade soybean futures are expected to begin day session trading 10 to 12 cents higher Tuesday as a weaker U.S. dollar, spillover from stronger prices overnight and demand for soy products from China are expected to underpin prices at the opening, analysts said.

 

In overnight e-CBOT trading, January gained 11 3/4 cents to US$10.58 per bushel. E-CBOT volume in January was 3,604 contracts.

 

The dollar is lower, which should supply support for prices, with spillover strength from the overnight trade also adding to the expected higher start, an analyst said. In addition, demand from China remains strong for U.S. soybeans, the analyst said.

 

Tuesday, the U.S. Department of Agriculture reported that 107,000 metric tonnes of soybeans had been sold to China for delivery in the 2007-08 marketing year.

 

Reports of lower-than-expected yields in China due to poor weather this year is also expected to add to the firm tone, a trader said.

 

The average soybean yield per hectare in China fell by more than 20% in 2007 to their lowest levels since 1993, China's National Development and Reform Commission said Tuesday.

 

On daily technical charts, January soybeans closed lower but near session highs as profit taking amid lower outside markets weighed, a technical analyst said. Soybean bulls still have the solid near-term technical advantage with their next upside price objective closing prices above solid technical resistance at the contract high of US$10.57 per bushel. The bears next downside objective remains closing prices below solid support at US$10.25, which is the bottom of an upside price gap on the daily bar chart.

 

First resistance is seen at Monday's high of US$10.49 1/2 and then at US$10.57. First support is seen at US$10.34 1/2 and then at US$10.31.

 

Deliveries posted against the November future totaled 222 contracts Tuesday. The house account of Term Commodities issued 99 contracts and the house account of Rosenthal issued 123 contracts. Large stoppers included the customer account of Bank of America which stopped 105 contracts and the customer account of JP Morgan which stopped 99 contracts. The last trade date assigned was Nov. 1.

 

In overseas markets, crude palm oil futures settled slightly higher after a two-sided session on the Bursa Malaysia Derivative Exchange with the benchmark January contract up MYR5 lower at MYR2,924/tonne.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange settled mixed. The benchmark May 2008 contract settled RMB9 lower at RMB4,504 per metric tonne.

 

The USDA is scheduled to release the weekly export inspections report at 1100 a.m. EST and the weekly crop progress report at 4:00 p.m. EST Tuesday. The reports were delayed a day due to the holiday.