July 15, 2008


CBOT Soy Outlook on Tuesday: Up 12-15c, outside markets support



The bullish influence of outside inflationary markets and lagging crop development are seen buoying Chicago Board of Trade soybean futures to start Tuesday's day session.


CBOT soybean futures are called 12 to 15 cents higher.


In overnight electronic trading, August soybeans were 14 1/4 cents higher at US$15.96 1/4 and November soybeans were 14 cents higher at US$15.73. December soyoil was 20 points higher at 65.40 cents per pound and December soymeal was US$4.60 higher at US$419.80 per short tonne.


Weakness in the U.S. dollar and firm energy prices, as well as strength in precious metals, are sending bullish signals to promote a firm start, analysts said.


Favorable near-term weather outlooks for crop development remains a hindrance to upside movement, but lagging crop development due to late plantings remains an underlying concern that will support prices, a CBOT floor analyst said.


The market is poised to consolidate after Monday's sharp declines, with bullish long term range fundamental outlooks amid tight projected stocks remaining the ultimate factor that will keep prices underpinned, he added.


A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid resistance at the contract high of US$16.36 3/4 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$15.00.


First resistance for November soybeans is seen at Monday's high of US$15.83 1/2 and then at US$16.00. First support is seen at Monday's low of US$15.49 1/4 and then at US$15.25.


The U.S. Department of Agriculture said 26% of the U.S. soybean crop has bloomed, up from 12% the prior week but below the five-year average of 45%. Traders had expected 25% of the U.S. soybean crop to be blooming.


In top soy producer Iowa, blooming of the soybean crop stood at 35%, up from 15% the preceding week but below the average of 54%. In Illinois, 24% of soybeans were blooming, up from 11% the previous week but below the average of 54%.


The USDA said the good-to-excellent condition rating for the U.S. soybean crop was 59%, remaining unchanged from the previous week. Traders had expected a one- to three-percentage point rise in the good-to-excellent condition rating from the previous week.


The DTN Meteorlogix Weather forecasts said hot weather over the western Midwest will be fairly short lived as thunderstorms move in from the north and west towards the southeast during the next few days. The east may see a little more of an extended drier, warmer spell but not enough to significantly impact crops.


The USDA announced private exporters reported the sale of 120,000 metric tonnes of U.S. soybeans to China for delivery in the 2008-09 marketing year.


In other news, China's soy oil imports in June rose 108% on the year to 170,000 metric tonnes of soy oil, according to preliminary data issued by the General Administration of Customs Tuesday. The country imported 1.3 million tonnes of soy oil in the first half, up 15% on year, it said.


In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday on technical buying. The benchmark January 2009 soybean contract settled RMB22 higher at RMB4,963 a metric tonne, or up 0.4%.


Crude palm oil futures on Malaysia's derivatives exchange ended slightly higher Tuesday, recovering from early losses after a rebound in soybean oil prices, said trade participants. The benchmark September contract on Bursa Malaysia Derivatives ended MYR26 higher at MYR3,550 a metric tonne after reaching a high of MYR3,660/tonne.

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