September 16, 2008

 

CBOT Soy Outlook on Tuesday: Lower, outside markets, lack of fresh support

 

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's day session lower, pressured by outside market weakness and a lack of fresh supportive news.

 

CBOT soybean futures are called 18 to 20 cents lower.

 

In overnight electronic trading, November soybeans were 20 cents lower at US$11.59. December soybean oil was 121 points lower at 45.35 cents per pound and December soybean meal was US$6.00 lower at US$329.80 per short tonne.

 

The market was poised to follow the overnight theme, with sharply lower crude-oil futures and a firmer U.S. dollar expected to attract speculative sellers amid bearish economic factors, analysts said.

 

The fallout from the financial and economic arenas will take center stage in early action again, with the absence a freeze threat and improved weather conditions for central U.S. crops this week keeping buyers cautious, said Vic Lespinasse, analyst with grainsanalyst.com.

 

Fundamentally, soybeans remain bullish, with lagging crop maturity and tight nearby supplies, but investor jitters from the financial sector are expected to mask supportive data.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at last week's high of US$12.22 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at Monday's low of US$11.55 1/4.

 

First resistance for November soybeans is seen at US$12.00 and then at Monday's high of US$12.10. First support is seen at US$11.68 and then at Monday's low of US$11.55 1/4.

 

U.S. Department of Agriculture left the soybean crop's good-to-excellent rating unchanged at 57% for the third week in a row. Traders had expected the rating to stay steady or drop as much as two percentage points.

 

The USDA said 21% of the crop was dropping leaves, down from 48% last year and the average of 41%.

 

The DTN/Meteorlogix weather forecast said heavy weekend rains, some more than 7.00 inches, may mean flooding of some fields in the region. High winds have been reported in the region with this rain. Warmer, drier weather during the next five to 10 days should allow fields to recover and allow crops to advance toward maturity, Meteorlogix said.

 

In the Delta, rainfall associated with hurricane Ike stayed west of major crop areas. Conditions for maturing crops and early harvests appear more favorable this week, Meteorlogix added.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday, amid a tumble in crude-oil prices. The benchmark January 2009 soybean contract settled 149 yuan (US$21.82) or 3.7% lower at RMB3,916 a metric tonne.

 

China imported 170,000 metric tonnes of soy oil in August, down 36% on year, according to initial data issued Tuesday by the General Administration of Customs. Imports in the first eight months totaled 1.64 million tonnes, up 2.5% on year, it said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 5.7% lower Tuesday, after falling to their lowest level in more than 17 months as investors took leads from weakness in crude oil. The new benchmark December contract on the Bursa Malaysia Derivatives ended 129 ringgit (US$37.54) lower, at MYR2,120 a metric tonne.
   

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