December 8, 2009

 

CBOT Soy Outlook on Tuesday: Seen up 4-6 cents on bullish fundamentals

 

 

Chicago Board of Trade soybean futures are poised to start Tuesday's day session higher, continuing Monday's upward movement on supportive fundamental influences.

 

CBOT soybean futures are seen starting 4 to 6 cents higher. In overnight trade, January soybeans were 6 1/2 cents higher at US$10.59 1/2, and March soybeans were 5 3/4 cents higher at US$10.66 3/4.

 

Strong underlying world soybean demand remains the fundamental driver of the market, with good exports and domestic demand serving as an upside catalyst for prices, analysts said.

 

Overnight price strength in Chinese soybean futures is a supportive feature for prices as well. China soybeans rallied to a new high for 2009.

 

The market is gearing up for a bullish revision in the U.S. Department of Agriculture's soybean balance sheet, with U.S. soybean ending stocks expected to be trimmed on increased consumption forecast for exports and crush, analysts said.

 

The fundamentals of the market are allowing futures to divorce from bearish influences in outside markets, where the U.S. dollar is higher, and crude oil and metals are lower in early trade, a CBOT floor analyst said.

 

Meanwhile, favorable South American crop conditions and forecasts for a record Brazilian crop is seen limiting advances in nearby contracts while applying pressure to deferred month futures.

 

A market technician said first resistance for January soybeans is seen at Monday's high of US$10.61 1/2 and then at the November high of US$10.69 1/4. First support is seen at Monday's low of US$10.38 1/2 and then at last week's low of US$10.31.

 

USDA will release its December supply and demand report Thursday at 8:30 am EST. The average estimate of analysts surveyed by Dow Jones Newswires pegs U.S. soybean 2009/10 ending stocks at 235 million bushels, down from the November USDA forecast of 270 million bushels.

 

December soyoil deliveries totaled 609 lots. Customer accounts at Man Professional Clearing issued and stopped 421 and 236 lots, respectively. The house account at Tenco stopped 112 lots. The last trade date assigned was Dec. 7.

 

In other news, National Commodities Supply Corp., or Conab, pegged Brazil's 2009-10 soy crop to a record 64.5 million metric tonnes. The latest estimate is up from its prior estimate in November of between 62.5 million metric tonnes and 63.6 million tonnes, and 13% above the 2008-09 crop of 57.1 million tonnes.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, touching a fresh 2009 high during the session, supported by overnight gains at the Chicago Board of Trade. The benchmark September 2010 soybean contract settled 0.6% higher at RMB4,109 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly higher Tuesday in thin, volatile trade that saw prices flipping from negative to positive territory. The February contract on the Bursa Malaysia Derivatives ended MYR2 higher at MYR2,561/tonne.