December 10, 2008
CBOT Soy Outlook Wednesday: Up 18-20 cents on outside market influences
Soybean futures on the Chicago Board of Trade are poised for a higher start to Wednesday's day session, feeding off the overnight theme and bullish outside market influences.
CBOT soybean futures are called 18 cents to 20 cents higher.
In overnight electronic trading, January soybeans ended 23 cents higher at US$8.36. January soymeal was US$6.10 higher at US$250.90 per short tonne, while December soyoil ended 80 points higher at 30.61 cents per pound.
A quiet news front will once again keep traders' attention on equity and crude oil markets for direction, analysts said.
In early market action, the U.S. dollar is lower, crude oil is up US$2.00 a barrel and stock index futures are pushing higher. Weakness in the U.S. dollar is a bullish influence on the markets, as it makes U.S. commodities more attractive to foreign buyers.
Fundamentally the market has little fresh inputs to digest, but light positioning ahead of Thursday's U.S. Department of Agriculture supply and demand reports is seen aiding the higher tone on short-covering and position-evening, a CBOT floor analyst said.
USDA will release its December S/D report Thursday 8:30 a.m. EST. The average of analysts estimates in a Dow Jones Newswires survey pegs 2008-09 U.S. soybean ending stocks at 200 million bushels, down 5 million from November's forecast. The estimates ranged between 161 million and 215 million bushels.
However, cautious activity will continue to limit upside moves, as traders remain concerned about global economic uncertainty, the analyst added.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at US$8.75 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the contract low of US$7.76 1/4 a bushel.
First resistance for January soybeans is seen at this week's high of US$8.27 1/2 and then at US$8.35 1/4. First support is seen at Tuesday's low of US$8.09 1/4 and then at US$8.00.
December soyoil deliveries totaled 764 lots. A customer account at ADM Investor Services was the primary issuer of 298 lots. The house account at Bunge Chicago was the primary stopper of 455 lots. The last trade date assigned was Dec. 1.
In other news, China imported 3.32 million metric tonnes of soybeans in November, according to preliminary data issued by the General Administration of Customs Wednesday, down 0.6% from a year earlier. Soybean imports in the first 11 months totaled 34.14 million tonnes, up 22% on year, said the customs.
Meanwhile, China's grain think tank kept its 2008 output forecast for the country's major crops, including soybean and corn, unchanged from the previous month, according to a report issued Wednesday by China National Grain and Oils Information Center. The center kept its forecasts for soybean and corn production at 16.50 million metric tonnes and 156 million tonnes, respectively, in its monthly report.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday with support from market expectations that the government will implement favorable policies. China's benchmark May 2009 soybean contract settled 33 Chinese yuan higher at RMB3,001/tonne, or up 1.1%.
Crude palm oil futures on Malaysia's derivatives exchange rose 3.0% Wednesday on estimated record high exports. Benchmark BMD February CPO futures ended MYR40 higher at MYR1,595 a metric tonne.