December 9, 2009

 

CBOT Soy Outlook on Wednesday: Pre report evening offsetting strong demand

 

 

Soybean futures at the Chicago Board of Trade is seen starting Wednesday's day session with a mixed undertone, with pre report position evening offsetting supportive demand fundamentals.

 

CBOT soybean futures are seen starting mixed. In overnight trade, Jan soybeans were 1 1/2 cents lower at US$10.42 1/2, and March soybeans were 1 1/4 cents lower at US$10.51 1/2.

 

The unwinding of some positions ahead of Thursday's supply and demand report, and a weak overnight theme will apply pressure to prices, while strong underlying export demand and bullish outlooks for Thursday's reports underpin prices, said Don Roose, president U.S. Commodities.

 

Outside markets are sending positive signals to traders, with weakness in the U.S. dollar index and higher crude oil and metal futures expected to add support to prices.

 

Meanwhile, favorable crop conditions in South America, a weak overnight bias in Asian soy and vegoil markets, and technical weakness following the market's upside run of the past two weeks will apply pressure Roose said.

 

Otherwise, traders said the market will watch outside market movement for clues to direction, with the participation of speculative a feature as traders take a cautious approach ahead of Thursday's supply and demand report.

 

A technical analyst said first resistance for January soybeans is seen at US$10.50 and then at Tuesday's high of US$10.63 3/4. First support is seen at this week's low of US$10.38 1/2 and then at last week's low of US$10.31.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 110,000 metric tonnes of soybeans for delivery to China during the 2009/2010 marketing year, the USDA said Wednesday.

 

USDA will release its December supply and demand report Thursday, 8:30 am EST. The average estimate of analysts surveyed by Dow Jones Newswires peg 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 696 lots. Customer accounts at Man Professional Clearing issued and stopped 320 and 188 lots respectively. The house account at Tenco issued and stopped 112 and 171 lots respectively. The last trade date assigned was December 8.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, as a dollar rebound and lower overnight crude oil prices weighed. The benchmark September 2010 soybean contract settled 1.0% lower at RMB4,070 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended mostly lower in range bound trade Wednesday, with investors taking cues from other commodities and weaker equity markets in the region, liquidating positions to take profit. The February contract on the Bursa Malaysia Derivatives ended MYR35 lower at MYR2,526 a metric tonne.