December 16, 2009

 

CBOT Soy Outlook on Wednesday: Up 3-5 cents on dollar; more china demand

 

 

Chicago Board of Trade soybean futures are expected to open 3 to 5 cents higher Wednesday following overnight gains as a weaker dollar supports the market.

 

In overnight trade, January soybeans were up 4 3/4 cents to US$10.59 3/4 per bushel and March soybeans were up 4 cents to US$10.66.

 

January soyoil was up 35 points to 39.99 cents per pound and January soymeal was up 50 cents to US$317.30 per short tonne.

 

The market is "on hold," choppy and rangebound, due to a lack of fresh fundamental news, said Don Roose, president of U.S. Commodities in Des Moines.

 

"We have just enough demand underneath the market that every time we break, there's Chinese buying," Roose said. "Every time we rally in here, the market is capped by producer selling and South American selling, so here we sit."

 

The demand from China continued Wednesday, as private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of soybeans for delivery to China during the 2009/2010 marketing year.

 

Analysts add that the trade is watching South American weather. While conditions might be too wet in southern Brazil, overall the South American weather is not bad enough to move the market, Roose said.

 

The market should get support from friendly outside markets, analysts said, including a weaker dollar and higher metals and crude oil.

 

Technically, the next upside technical objective for the bulls is pushing and closing January prices above solid technical resistance at the December high of US$10.78 1/2 a bushel. The next downside price objective for the bears is pushing and closing prices below solid technical support at the December low of US$10.19 a bushel, a technical analyst said.

 

First resistance for January soybeans is seen at Tuesday's high of US$10.68 1/2 and then at US$10.78 1/2. First support is seen at Tuesday's low of US$10.49 1/2 and then at US$10.40.

 

In other markets, crude palm oil futures on Malaysia's derivatives exchange rose Wednesday on short covering and fresh buying as investors took cues from higher crude and soyoil prices, trade participants said.

 

The new benchmark March contract on Bursa Malaysia Derivatives ended 2.2% higher at MYR2,586 a metric tonne, after rising to an intraday high of MYR2,596/tonne, its highest level since Dec. 7.

 

China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, with firm counterparts traded at the CBOT and crude oil prices providing support.

 

The benchmark September 2010 soybean contract settled 0.2% higher at RMB4,027 a metric tonne.