December 2, 2009

 

CBOT Soy Outlook on Wednesday: Lower on profit-taking, lack of fresh news

 

 

Chicago Board of Trade soybean futures are expected to start Wednesday's day session lower, under pressure from profit-taking on prior gains amid the absence of fresh supportive news.

 

CBOT soybean futures are seen starting 3 cents to 5 cents lower. In overnight trade, January soybeans were 4 1/2 cents lower at US$10.55, and March soybeans were 4 1/2 cents lower at US$10.61 1/2.

 

A quiet news front have futures poised to follow the lower overnight theme, with a firmer U.S. dollar and lower energy prices applying outside pressure, analysts said.

 

Carryover selling from Tuesday's late technical weakness and lower cash basis bids is seen adding to the defensive tone.

 

However, the market only posted modest declines overnight and with higher precious metal futures providing some mixed outside signals, choppy activity may be in store for traders.

 

"The market is set to start lower, but traders will take a cautious approach as they wait and see what the funds want to do," a CBOT floor analyst said.

 

Looking ahead, with end-user supply needs essentially covered through mid-January, traders will watch for crop risks in South America for fundamental strength, he added.

 

A technical analyst said first resistance for January soybeans is seen at US$10.69 1/4 and then at Tuesday's high of US$10.78 1/2. First support is seen at this week's low of US$10.50 1/2 and then at US$10.40.

 

The DTN Meteorlogix weather forecast said the weather pattern in Argentina-growing areas looks drier during the next week to 10 days, however, not quite as dry as it looked earlier this week.

 

In Brazil, crop-weather conditions are favorable to nearly ideal for early growth of soybeans at this time. The possible exception is in Rio Grande Do Sul where it is still very wet. However, conditions should slowly improve in this area with time, Meteorlogix said.

 

December soyoil deliveries totaled 775 lots. Customer accounts at ADM Investor Services and Man Professional Clearing issued 310 and 239 lots respectively. A customer account at Man Professional Clearing stopped 402 lots. The last trade date assigned was Nov. 30.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, consolidating due to lack of support from CBOT Tuesday. The benchmark September 2010 soybean contract settled RMB12 a metric toonne lower at RMB4,016/toonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended down Wednesday in thin, volatile trade that tracked similar volatility in crude oil and soyoil futures, traders said. The February contract on the Bursa Malaysia Derivatives exchange ended MYR6 lower at MYR2,489 a metric toonne.