September 17, 2008
CBOT Soy Outlook on Wednesday: Up 10-15 cents; outside market stability supports
Signs of some stability in outside markets coupled with oversold conditions are seen sparking a short covering bounce in Chicago Board of Trade soybean futures to start Wednesday's session.
CBOT soybean futures are called 10 cents-to-15 cents higher.
In overnight electronic trading, November soybeans were 12 1/2 cents higher at US$11.36 1/2. December soyoil was 33 points higher at 44.40 cents per pound and December soymeal was US$5.10 higher at US$324.60 per short tonne.
In the absence of fresh fundamental news, futures will continue to follow the lead of outside markets, with higher crude oil and a lower U.S. dollar index serving as the catalyst for the higher theme, said Vic Lespinasse, analyst with grainanalyst.com.
At 9:07 a.m., EDT, crude oil futures are up US$2.55 a barrel and the U.S. dollar index was lower.
News of the Federal Reserve providing monetary relief to American International Group Inc. (AIG) helped temper bearish sentiment in the financial sector and that is seen taking some pressure off large speculative funds to liquidate positions in commodities, analysts added.
Underlying bullish fundamentals from tight nearby stocks and the uncertainty of 2008 U.S. yields remain a supportive back drop for prices. However, buyers will continue to keep a close eye on outside market factors as global economic woes will keep buyers on edge.
A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at the August low of US$11.68 a bushel. The next downside price objective is pushing and closing prices below major psychological support at US$11.00.
First resistance for November soybeans is seen at US$11.50 and then at US$11.68. First support is seen at Tuesday's low of US$11.10 1/4 and then at US$11.00.
The DTN Meteorlogix weather forecast said dry weather for at least the next 5 to 7 days along with mostly above normal temperatures will help fields recover from recent rains and will help crops continue move towards maturity.
In the Delta, drier, warmer weather during the next 5 to 7 days will favor soybean harvests.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday amid global financial woes. The benchmark January 2009 soybean contract settled RMB37 lower at RMB3,879 a metric tonne.
Crude palm oil futures on Malaysia's derivatives exchange fell 3.8% Wednesday on a fresh liquidation of positions towards the close of trading amid heavy defaults in the cash market, said trade participants. The benchmark December contract on the Bursa Malaysia Derivatives ended MYR80 lower at MYR2,040 a metric tonne.