October 21, 2008


CBOT Soy Outlook on Tuesday: Down 10-14 cents, outside markets, buyer exhaustion 


Soybean futures on the Chicago Board of Trade are seen starting Tuesday's day session lower, pressured by outside market influences.


CBOT soybean futures are called 10-to-14 cents lower.


In overnight electronic trading, November soybeans were 14 cents higher at US$9.15, January soybeans were 14 1/4 cents lower US$9.26 1/2. December soyoil was 102 points lower at 36.59 cents per pound and December soymeal was US$2.50 lower at US$264.00 per short tonne.


After a couple of days of strong gains, upside movement is a little exhausted, analysts said. Without the support of outside financial and crude oil futures, buyers remain hesitant in the face of global economic uncertainty, analysts added.


The market has bullish underlying fundamentals, but with crude oil down over US$2.00 a barrel, stock index futures pointing lower and harvest progress only slightly below the five year average, the market has little to inspire upside momentum, a CBOT floor trader said. However, traders will keep a close eye on the financial sector and any bounce in stock or energy prices could quickly ignite a price reversal, he added.


A market technician said the next upside price objective for November soybeans is to push and close prices above major psychological resistance at US$10.00 a bushel. The next downside price objective is pushing and closing prices below major psychological support at US$9.00.


First resistance for November soybeans is seen at Monday's high of US$9.48 and then at US$9.72 1/2. First support is seen at US$9.25 and then at Monday's low of US$9.02 3/4.


In demand news, U.S. Department of Agriculture announced Tuesday private exporters reported the sale of 220,000 metric tonnes of U.S. soybeans for delivery to unknown destinations in the 2008-09 marketing year. USDA also reported the sale of 110,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.


The U.S. soybean harvest was 67% complete, down from 72% last year and the average of 74%, USDA reported Monday. Analysts had expected harvest to be 65% to 75% complete.


In Iowa, 80% of the soybean crop was harvested, up from 75% last year but below the average of 89%. In Illinois, harvest was 63% complete, down from 91% last year and the average of 83%. Harvest was 74% complete in Indiana, compared to 78% in 2007 and the average of 72%.


The USDA said 95% of the soybean crop was dropping leaves, compared to 98% last year and the average of 98%.


The DTN Meteorlogix weather forecast said rain and cool weather will likely delay/disrupt crop harvests through western areas of the Midwest during the next few days. Eastern areas could still do some work for a couple more days.


In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, but the rally moderated after a surge in earlier sessions. The benchmark May 2009 soybean contract settled RMB31, or 0.9%, higher at RMB3,361/tonne.


Crude palm oil futures on Malaysia's derivatives exchange ended 1.5% down Tuesday in a day of volatile trade amid conflicting cues, of an expected decrease in palm oil stocks versus worries over weak exports and lower crude oil prices, said trade participants. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR25 down at MYR1,652 a metric tonne.

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