December 3, 2008
CBOT Soy Outlook on Wednesday: Down 2-4c; Overnight Theme, Eyeing Outsides
Chicago Board of Trade soybean futures are expected to start Wednesday's day session on the defensive, continuing the overnight theme on technical weakness and a lack of fresh supportive news.
CBOT soybean futures are called 2 cents to 4 cents lower.
In overnight electronic trading, January soybeans ended 3 1/4 cents lower at US$8.23 3/4. January soymeal was US$1.10 lower at US$244.20 per short tonne, while December soyoil ended 8 points lower at 30.69 cents per pound.
The market had a poor technical close Tuesday, with the most active January future settling at a 1 1/2-year low. Technically the market is weak, outside markets are not providing any strength and with fresh supportive news scarce downside movement is seen as the path of least resistance, a CBOT floor analyst said.
Traders will once again eye outside markets for direction unless demand news emerges to generate strength, analysts added.
In early action, outside markets are mixed, with crude oil choppy, the dollar firmer and stock index futures pointing lower.
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 psychological support at US$8.00 a bushel.
First resistance for January soybeans is seen at US$8.35 1/4 and then at US$8.50. First support is seen at Tuesday's low of US$8.26 and then at US$8.00.
The DTN Meteorlogix weather forecast said Argentina's weather now looks to be drier again during the next week or so. Meanwhile, drier and somewhat warmer temperatures forecast through southern Brazil soybean areas will reduce available soil moisture for the early crop.
December soyoil deliveries totaled 638 lots. A customer account at ADM Investor Services was the primary stopper of 534 lots. The last trade date assigned was Nov. 5.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, taking their cues from cheaper imports and worries about falling domestic demand. The benchmark May 2009 soybean contract lost 0.2% to settle at RMB3,134 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange ended lower for the fourth successive trading day Wednesday on fresh selling pressure, long liquidation and overnight weakness in crude oil and soyoil prices. The benchmark February contract on the Bursa Malaysia Derivatives ended MYR67, or 4.2%, lower at MYR1,536 a metric tonne.