December 18, 2007

 

CBOT Soy Outlook on Tuesday: Down 1-2 cents; e-CBOT, light profit taking

 

 

Soybean futures on the Chicago Board of Trade are expected to start Tuesday's day session with modest declines, pressured by follow through weakness from the overnight session and light profit taking pressure.

 

CBOT soybean futures are called to start the session 1 to 2 cents lower.

 

In overnight e-CBOT trading, January soybeans were 3/4 cent lower at US$11.56 per bushel, and March soybeans were 1 1/2 cents lower at US$11.74 1/2.

 

A quiet news front is expected to promote a choppy tone once again, as the market settles into a consolidation mode ahead of the holidays, with traders evening positions in the last full trading week of the year, analysts said.

 

The end of the year is approaching and many participants will close up shop this week, unless some fresh fundamental news surfaces to generate some market movement, traders said.

 

However, a bullish underlying fundamental theme and strength in outside inflationary markets is expected to provide support to keep prices moving in sideways fashion, with downside pressure limited, a CBOT floor analyst added.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices above psychological resistance at US$12.00 a bushel. The next downside price objective is closing prices below solid technical support at US$11.50.

 

First resistance for March soybeans is seen at the contract high of US$11.83 and then at US$11.90. First support is seen at Monday's low of US$11.68 and then at US$11.55.

 

The DTN Meteorlogix Weather Service said Brazil has favorable conditions for soybeans at this time. The Rio Grande do Sul region still bears watching in the long range, however, as it could be drier and warmer than normal.

 

In Argentina, last week's rain and the cooler weekend temperatures helped improve conditions for crops, Meteorlogix reports. However, western crop areas could still use more rain, they added. The pattern favors periodic very hot temperatures but there is also some chance for thunderstorms at times. These thunderstorms chances are important to help crops through the periods of heat, Meteorlogix said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday, as the latest measures by the government to reduce exports of major agricultural commodities weighed on prices amid expectations of more domestic supply. The benchmark September 2008 soybean contract settled RMB80 lower at RMB4,446 a metric tonne after trading between RMB4,428 and RMB4,495/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday amid profit-taking in thin trade, taking some direction from Monday's losses in soyoil and crude oil futures, trade participants said. The benchmark March contract on Bursa Malaysia Derivatives ended MYR25 lower at MYR2,950/tonne after reaching an intraday low of MYR2,933/tonne.