November 19, 2008
CBOT Soy Outlook on Wednesday: Up 4-6 cents, tracking overnight gains
Soybean futures on the Chicago Board of Trade are poised for a higher start to Wednesday's day session, following through on overnight gains amid a dearth of fresh fundamental news.
CBOT soybean futures are called 4 to 6 cents higher.
In overnight electronic trading, January soybeans ended 5 3/4 cents higher at US$9.07 3/4. January soymeal were US$1.90 higher at US$271.10 per short tonne, while December soyoil shed 3 points to 32.63 cents per pound.
The market is set to battle bearish outside macro market influences, with a weaker U.S. dollar and dryness concerns in Argentina supporting prices, analysts say.
A lack of fresh news is expected to limit volume, but end-of-the-month and pre-holiday short covering provides underlying strength.
Futures have shown signs that a near term bottom is in place, but lingering worries associated with a global recession and what impact that will have on demand continues to limit buying interest, analysts added.
A technical analyst said the recent collapse in volatility raises speculation that a bigger price move is on the horizon. The next upside price objective for January soybeans is to push and close prices above solid technical resistance at last week's high of US$9.54 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$8.72 3/4.
First resistance for January soybeans is seen at this week's high of US$9.17 3/4 and then at US$9.25. First support is seen at Tuesday's low of US$8.92 1/2 and then at this week's low of US$8.85.
The DTN Meteorlogix weather forecast said conditions in Argentina's major crop regions will be mainly dry and warm to hot during the next 10 days. The early soybean crop may come under increasing stress during this period.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on spillover strength of a strong rally in equity markets in late session, amid a lack of fundamental leads. The benchmark May 2009 soybean contract settled 1.6% higher at RMB3,282 a metric tonne, after trading between RMB3,229/tonne and RMB3,336/tonne.
Crude palm oil futures on Malaysia's derivatives exchange ended 3.1% higher Wednesday on expectations of a 15%-20% on-month rise in exports during the Nov. 1-20 period and India's decision to levy a 20% import duty on crude soybean oil. The benchmark February contract on the Bursa Malaysia Derivatives ended MYR44 higher at MYR1,480/tonne after reaching an intraday high of MYR1,493/tonne.