December 2, 2008
CBOT Soy Outlook on Tuesday: Up 3-5 cents; consolidating Monday's declines
Chicago Board of Trade soybean futures are poised to start Tuesday's day session firmer, as the market attempts to stabilize from Monday's sharp declines.
CBOT soybean futures are called 3 cents to 5 cents higher.
In overnight electronic trading, January soybeans ended 3 1/2 cents higher at US$8.49 1/2. January soymeal were US$0.80 higher at US$251.30 per short tonne, while December soyoil ended 19 points higher at 31.59 cents per pound.
A quiet news front is leaving the market without leadership once again, but firmer outside market influences should attract some short-covering to underpin prices, analysts said.
Consolidation is seen as the early theme, with traders watching to see if underlying technical support continues to hold and the direction of equity, crude oil and the U.S. dollar index for near tern leadership, analysts added.
In early action, the U.S. dollar is lower, crude oil and stock index futures are higher.
The lower U.S. dollar is supportive because it makes U.S. commodities more attractive to foreign buyers.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above psychological resistance at US$9.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the November low of US$8.35 1/4.
First resistance for January soybeans is seen at US$8.50 and then at US$8.70. First support is seen at Monday's low of US$8.41 and then at the October low of US$8.38 1/2.
The DTN Meteorlogix weather forecast said rain and storms in Argentina late last week and early in the weekend greatly improved soil moisture, but it now looks to be drier again during the next week or so.
In Brazil, showers and cooler temperatures should favor early growth of crops through southern and central locations. However, more rain will still be needed, especially in Rio Grande Do Sul, where it has been drier than normal since the Nov. 1.
December soyoil deliveries totaled 2,305 lots. The house account at ADM Investor Services was the primary issuer of 2,034 lots, while a customer account at ADM Investor Services stopped 941 lots. The last trade date assigned was Oct. 31.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, as cheaper imported soybeans weighed on local prices. The benchmark May 2009 soybean contract settled RMB56 lower at RMB3,139 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange fell sharply Tuesday on spillover weakness from crude oil, but staged a recovery on short covering, trade participants said. The benchmark February contract on Bursa Malaysia Derivatives ended MYR25 lower at MYR1,603 a metric tonne after reaching an intraday low of MYR1,560.