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DJ CBOT Soy Outlook:Seen Up On Outside Mkt Support, Strong Demand83 days ago
CHICAGO (Dow Jones)--Supportive outside market influences and strong demand fundamentals have Chicago Board of Trade soybean futures poised for a higher start to Wednesday's day session.
CBOT soybean futures are seen starting 13 to 15 cents higher. In overnight trade, January soybeans were 16 3/4 cents higher at $10.46 1/4, and March soybeans were 15 3/4 cents higher at $10.51 1/2.
Early weakness in the U.S. dollar index is providing broad-based strength across the commodity sector, a bullish signal for speculative money flow to keep prices in an upward trend, a CBOT floor analyst said.
The technical charts are supportive, with prices rising to 3-month highs amid the inability of futures to attract any aggressive selling despite record crops and improved conditions for South American plantings and early crop development.
Solid underlying demand provides fundamental support, with firm cash basis levels, strong export demand, lingering tight meal supplies in the eastern Midwest, and a supportive crush pace underpinning prices.
U.S. soybeans still enjoy the most enviable position of being the principle source of soybeans to importers until South American supplies come online in early 2010, AgResource Co. said in a morning market note.
However, traders said the session has the potential for choppy activity, as overbought technical indicators open the door for profit taking to emerge on any sign of exhausted buying.
A technical analyst said the next upside technical objective for January soybeans is pushing and closing prices above solid technical resistance at the August high of $10.68 a bushel. The next downside price objective is pushing and closing prices below major psychological support at $10.00 a bushel.
The DTN Meteorlogix Weather forecast said rain from the southern part of the western Midwest through much of the eastern Midwest early this week will further delay the remaining summer crop harvests. The outlook for next week is showing more rain or snow in the region.
Meanwhile, conditions for Argentina soybeans are improving through major growing areas from Cordoba and Sante Fe southward due to near-to-above-normal rainfall and only brief hot spells, Meteorlogix said.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, along with the rise on CBOT Tuesday. The September 2010 soybean contract settled CNY20 a metric ton higher at CNY3,799/ton.
Crude palm oil futures prices on Malaysia's derivatives exchange ended 2.5% higher Wednesday, at its highest since Aug. 24, following short covering as investors took leads from higher crude prices and heavy rains across oil palm growing regions. The benchmark February contract on the Bursa Malaysia Derivatives ended MYR58 higher at MYR2,400 a ton.
-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com
(Zheng Xiaolu and Shie-Lynn Lim contributed to this story from Beijing and Kuala Lumpur respectively)
(END) Dow Jones Newswires
November 18, 2009 09:45 ET (14:45 GMT)
By Andrew Johnson Jr.
Of DOW JONES NEWSWIRES
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