November 26, 2008
CBOT Soy Outlook on Wednesday: Pre-holiday rise expected
Soybean futures on the Chicago Board of Trade are expected to firm during Wednesday's opening trades, following overnight gains and a slight rise in crude oil.
CBOT soybean futures are called 10-12 cents higher.
In overnight electronic trading, January soybeans rose 11 cents to US$8.94 per bushel. The March contract added 13 1/2 cents to US$9.05. December soymeal gained US$2.40 to US$264.90 per short tonne and December soyoil increased 38 points to 32.62 cents per pound.
Market bulls are aiming to pierce the technical resistance point at last week's high of US$9.21 1/4 a bushel, a market technician said, marking first resistance at Tuesday's high of US$8.92 3/4.
Mixed outside market forces kept soybeans nearly unchanged Tuesday, but "bears remain in overall near-term technical command," the technician said.
Soybean bears aim to close January soybeans below solid technical resistance at last week's low of US$8.35 1/4, he said, pegging Tuesday's low ofUS$8.71 as first support.
Traders are expected to even up positions ahead of Thanksgiving, as many will be on holiday for the rest of the week, a CBOT floor trader said.
"We'll start a little better this morning," he said.
U.S. soybean crushings totaled 149.7 million bushels in October, according to data released by the U.S. Census Bureau Wednesday. On average, analysts anticipated a 151.1-million-bushel crush, according to a Dow Jones Newswires survey. Crushings were up from 125.7 million bushels a month earlier and 164 million bushels a year earlier.
The report offered bearish news for meal and bullish for soyoil, noted analyst Vic Lespinasse, of grainanalyst.com.
Soymeal stocks for October totaled 370,291 short tonnes, compared to the average guess of 279,500. Meal stocks were 293,900 short tonnes in September and 313,300 million a year earlier.
Soyoil stocks totaled 2.384 billion pounds. Analysts, on average, expected 2.502 billion pounds.
"The key to price discovery in soybeans over the next three months will be South American weather influences on soybean yield prospects and the extent of Chinese imports of U.S. soybeans," said Shawn Hackett, president of Hackett Financial Advisors, in his Hackett Money Flow Report.
"Should weather prove less than favorable or should China surprise us with larger than expected exports (as they have done over the last three years), soybean prices could levitate rather strongly," he said. "Should both of the above factors remain subdued, an extended trading range can be expected.
"Similar to corn, I am seeing little current evidence that...the open interest and the commercials are flashing bullish signals," Hackett said. "All this argues for patience over aggressiveness when probing the buy-side of the bean market."
In global trading news, China's soybean futures fell slightly Wednesday in thin trade on the Dalian Commodity Exchange, taking their cue from weaker crude oil amid a lack of fresh news to swing prices in a definitive direction.
The benchmark May 2009 soybean contract lost 0.7% to settle at RMB3,266 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange broke above MYR1,600 a metric tonne Wednesday for the first time in 15 days on strong demand in the cash market, a rise in biodiesel exports, and heavy rains across most oil palm growing regions, which can slow production.
The benchmark February contract on Bursa Malaysia Derivatives ended MYR78 higher at MYR1,598/tonne after reaching an intraday high of MYR1,604, up 5.5% from the previous close. The contract ended higher for the third successive day.
In Brazil, "soil moisture is being depleted in the major soybean areas of Rio Grande do Sul and Parana, [with] the driest weather is through western Rio Grande do Sul," said DTN Meteorolgix.
Conditions in the top soy-producing region of Mato Grosso are "generally favorable", DTN said.
Meanwhile, in Argentina, "crop stress is increasing," the forecasters add.