December 19, 2007

 

CBOT Soy Outlook on Wednesday: Up 3-5 cents; higher e-CBOT; range-Bound trade

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session on firmer footing, in step with higher overnight prices as futures continue to jockey inside a recent trading range.

 

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

 

In overnight e-CBOT trading, January soybeans were 6 1/4 cents higher at US$11.56 per bushel, and March soybeans were 5 1/2 cents higher at US$11.74.

 

A lack of fresh news to feed bullish appetites is expected to limit upside potential, but consolidation looks to be the near-term theme as the market winds down into the holidays, analysts said.

 

Futures are expected to remain underpinned by bullish long range fundamental outlooks, but overbought conditions, slowing export demand and less threatening South American weather is seen attracting month and year-end profit taking on upward price moves, analysts added.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices above solid chart resistance at the contract high of US$11.83 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 Tuesday's high of US$11.74 1/2 and then at US$11.83. First support is seen at Tuesday's low of US$11.65 and then at US$11.55.

 

Meanwhile, private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tonnes of soybeans for delivery to unknown destinations during the 2007-08 marketing year, the USDA said Wednesday.

 

The DTN Meteorlogix Weather Service said the long range outlook for Brazil's Rio Grande Do Sul features an increased chance for rain Wednesday. Should this occur it would most likely maintain favorable growing conditions, Meteorlogix said.

 

In Argentina, dry and hot weather Wednesday and Thursday will dry the top soils and increase stress to corn and soybeans, Meteorlogix forecasts. The next chance for showers in the corn and soybean belt appears to be Sunday into Monday. However, there is some uncertainty in this outlook.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday on losses in CBOT soybean futures Tuesday. The benchmark September 2008 soybean contract fell RMB3 to settle at RMB4,443 a metric tonne, after trading between RMB4,419/tonne and RMB4,461/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Wednesday after the weather bureau warned of more rains in oil-palm-growing regions, which have already suffered floods that affected output, trade participants said. The benchmark March contract on Bursa Malaysia Derivatives ended MYR12 higher at MYR2,962/tonne after reaching an intraday high of MYR2,982/tonne.