December 9, 2008
CBOT Soy Outlook on Tuesday: Lower; follow overnights, lack of influence
Soybean futures on the Chicago Board of Trade are seen starting Tuesday's day session on the defensive, in tune with the overnight trend amid a lack of supportive outside influences.
CBOT soybean futures are called 5 cents to 7 cents lower.
In overnight electronic trading, January soybeans ended 6 1/2 cents lower at US$8.14. January soymeal were US$2.40 lower at US$245.30 per short tonne, while December soyoil ended 13 points lower at 29.64 cents per pound.
Mixed signals from outside markets are promoting cautious activity, with the lack of follow through momentum from Monday's technical bounce expected to keep buyers hesitant to extend upside moves, analysts said.
However, without clear signals from the crude oil and stock markets, futures could quickly shift direction if outside markets make to strong move in either direction, a CBOT floor analyst said.
Nevertheless, an uncertain global economy is expected to promote hesitancy among traders, unwilling to take on added risk in the absence of fresh fundamental news. Light trade positioning ahead of Thursday's supply and demand reports is expected as well.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at US$8.75 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the contract low of US$7.76 1/4 a bushel.
First resistance for January soybeans is seen at Monday's high of US$8.27 1/2 and then at US$8.35 1/4. First support is seen at US$8.00 and then at Monday's low of US$7.88 1/2.
The DTN Meteorlogix weather forecast said scattered to widely scattered showers will help ease stress to Argentine crops during the next two to three days. However, additional hot weather may reemerge in the region.
In Brazil, very hot weather was present Monday and possibly Tuesday as well. Thunderstorms are to move in Tuesday night so Wednesday's temperatures shouldn't be as hot.
December soyoil deliveries totaled 214 lots. A customer account at ADM Investor Services was the primary stopper of 159 lots. The last trade date assigned was Nov. 21.
In overseas markets, China's benchmark soybean futures traded on the Dalian Commodity Exchange pared gains as traders took Monday's rise as an opportunity to sell and exit the market. The May 2009 contract edged lower in the afternoon trade to settle RMB16 higher at RMB2,968/tonne.
Crude palm oil futures on Malaysia's derivatives exchange rose as much as 4.5% Tuesday, recovering from negative territory amid expectations exports during the Dec. 1-10 period will reach a new high, said trade participants. The benchmark February contract ended MYR56, or 3.7%, higher at MYR1,555 a metric tonne.