December 12, 2007

 

CBOT Soy Outlook on Wednesday: Down 3-5 cents; profit taking of recent gains

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session on the defensive, easing lower on profit taking pressure from Tuesday's rise to new contract highs.

 

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

 

In overnight e-CBOT trading, January soybeans were 4 1/2 cents lower at US$11.31 per bushel, and March soybeans were 5 1/2 cents lower at US$11.49. The absence of fresh fundamental news is providing little direction to futures, with traders poised to book some profits, analysts said.

 

However, with a strong underlying demand base, a cheaper U.S. dollar and a bullish technical trend, downside potential remains limited in the absence of any fresh bearish features to encourage traders to abandon their long range bullish outlooks, analysts added.

 

A technical analyst said stochastics and the relative strength index are becoming overbought but remain bullish, signaling that sideways to higher prices are possible near-term. If the market extends this fall's rally, monthly resistance crossing at 11.78 basis the March contract is the next upside target, he said. Closes below the 20-day moving average would confirm that a short-term top has been posted, he added.

 

The DTN Meteorlogix Weather Service said a cold front moving in this Friday and Friday night in Argentina will produce a few thunderstorms but with low coverage. Crops continue under some stress in the western growing areas due to dryness and periodic hot conditions, Meteorlogix added.

 

In deliveries, December soyoil deliveries totaled 214 lots. Issuers were scattered among various commission houses, while a customer account at Astro Division of UBS Securities was the primary stopper of 149 lots. The last trade date assigned was December 10.

 

December soymeal deliveries totaled 781 lots. The house account at ADM Investor Services stopped 112 lots, with customer accounts at Man Professional Clearing the issuers and stoppers of 364 lots and 177 lots respectively. The last trade date assigned was December 11.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday in a technical correction, although CBOT soybeans set new contract highs Tuesday. The benchmark September 2008 soybean contract settled RMB29 lower at 4,428 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Wednesday amid sluggish trade and conflicting leads. The benchmark February contract ended MYR3 lower at MYR2,877/tonne, after reaching an intraday low of MYR2,859/tonne.