August 6, 2008

 

CBOT Soy Outlook on Wednesday: Down 3-5 cents, follow overnight, consolidation seen

 

 

Chicago Board of Trade soybean futures are called to open lower, in line with overnight trade, but traders anticipate a consolidative theme amid a quiet news front and oversold ideas.

 

CBOT soybean futures are called 3 to 5 cents lower.

 

In overnight electronic trading, August soybeans were 9 cents lower at US$12.53 1/2 and November soybeans were 3 cents lower at US$12.66. December soyoil was 35 points higher at 54.50 cents per pound and December soymeal was US$1.60 lower at US$337.90 per short tonne.

 

The market continues to face bearish near-term fundamentals, but the trade is getting a little weary of pressing prices ahead of the Aug. 12 crop report, and its overdue for a bounce following a nearly US$4.00 break in prices in the last month, said Vic Lespinasse, analyst with grainanalyst.com.

 

"The calls are lower, but we could trade on either side of unchanged today," he added.

 

U.S. Department of Agriculture is scheduled to release its first U.S. corn and soybean estimates using field surveys at 8:30 a.m. EDT Aug. 12.

 

World commodity markets are showing signs of stabilizing, with Asian soy and vegoil markets bouncing overnight.

 

Nevertheless, weather remains bearish, with conditions seen favorable for the next ten days, and with crude oil tracking lower and the U.S. dollar higher, upside potential remains limited, traders said.

 

There is a long way to go before the 2008 crop is made, with the uncertainty of next week's crop report and the potential for yield losses if a normal or an early freeze occurs in the fall, and that should provide some price stability for prices, traders added.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at this week's high of US$13.61 a bushel. The next downside price objective is pushing and closing prices below solid technical support at Tuesday's low of US$12.51.

 

First resistance for November soybeans is seen at US$12.85 and then at US$13.00. First support is seen at Tuesday's low of US$12.51 and then at US$12.25.

 

The DTN Meteorlogix weather forecast said near to below normal temperatures and near to above normal rainfall during the next 6-10 days in the U.S Midwest will maintain favorable conditions for flowering and pod filling soybeans.

 

In the U.S. Delta, scattered showers and thunderstorms along with cooler temperatures Thursday and Friday will ease stress to developing crops due to hot, dry weather, Meteorlogix added.

 

In deliveries, August soybean deliveries totaled 8 lots. A customer account at FC Stone was the issuer, and a customer account at ADM Investor Services was the stopper. The last trade date assigned was June 30.

 

In other news, the China National Grain and Oils Information Center raised its 2008 output forecasts for soybeans in a monthly report released Wednesday. The government think tank increased its soybean output estimate by 1 million metric tonnes to 17.5 million tonnes.

 

Egypt's state-owned Food Industries Holding Company said Wednesday it is tendering to buy 20,000 metric tonnes of soyoil, on a cost and freight basis. Egypt's state-owned General Authority for Supply Commodities is tendering to buy 20,000-22,000 metric tonnes of soyoil through private intermediary Meditrade, a Cairo-based trader said Wednesday.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday, rebounding from a sharp recent fall. The benchmark January 2009 soybean contract settled RMB44 higher at RMB4,088/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Wednesday for the first time this week on a technical rebound, despite a sharp overnight fall in soyoil and crude oil prices, said trade participants. The benchmark October contract on Bursa Malaysia Derivatives ended MYR40, or 1.5%, higher at MYR2,790 a metric tonne.
   

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