December 4, 2007

 

CBOT Soy Outlook on Tuesday: Up 3-5 cents; following e-CBOT overnight trend

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session firmer, taking its cue from overnight action with a lack of fresh fundamental news keeping futures in search of direction.

 

Crude oil futures and the U.S. dollar index are lower, with metal futures higher in early action.

 

CBOT soybean futures are called to start the session 3 to 5 cents higher.

 

In overnight e-CBOT trading, January soybeans were 4 1/4 cents higher at US$10.83 per bushel, and March soybeans were 2 1/2 cents higher at US$11.00.

 

The market is poised for a higher start, but two-sided trade is possible with mixed price action in outside markets opening the door for futures to drift in either direction amid the absence of any significant fresh news, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The trade will continue to watch outside markets for leadership, with concerns over South American weather an underlying feature as fresh fundamental news is centered on other grain futures Tuesday, Roose added.

 

Meanwhile, carryover buying from Monday's late day bounce off its lows is seen providing technical strength to underpin prices as well, analysts added.

 

A technical analyst said stochastics and the relative strength index are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 10.71 1/4 basis January futures would confirm that a short-term top has been posted. If January renews this fall's rally, monthly resistance crossing at 11.78 3/4 is the next upside target, he added.

 

The DTN Meteorlogix Weather Service said rains in Brazil will maintain favorable growing conditions from Parana northward during the next five days. Rio Grande Do Sul is slowly trending drier but will still have adequate moisture for needs of the crop.

 

In Argentina, thundershowers and cooler temperatures will favor developing crops, especially in the northern and eastern areas, Meteorlogix said.

 

In other news, Brazil's 2007-08 soy crop is 87% planted as of Nov. 30, slightly behind schedule when compared to the 2006-07 planting season, agribusiness consultancy Celeres said Tuesday. Dry weather led to a late start to the planting season in Mato Grosso, the principal soy producing state in Brazil. Rains have returned to normal levels at this time.

 

In deliveries, December soyoil deliveries totaled 1,667 lots. Issuers and stoppers were scattered among various commission houses, with customer accounts at Man Professional Clearing the primary issuer and stopper of 548 and 783 lots respectively. The last trade date assigned was December 3.

 

December soymeal deliveries totaled 561 lots. Issuers and stoppers were scattered among various commission houses, with the house account at ADM Investor Services the primary stopper of 268 lots. The last trade date assigned was December 3.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Tuesday, with long position holders continuing to unwind in anticipation of rising supplies of imports in the domestic market. The benchmark September 2008 soybean contract settled RMB30 higher at RMB4,301 a metric tonne after trading between RMB4,276 and RMB4,327/tonne.

 

Crude palm oil futures traded on Malaysia's derivatives exchange ended lower Tuesday on late afternoon selling prompted by the fall in soyoil during Asian trading hours. The benchmark February contract ended MYR37 lower at MYR2,889/tonne, close to an intraday low of MYR2,887/tonne.