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Soybean Futures Expected to Rise Amid Asian Rust Concerns

Strategic Insights

— 1 min read

Concerns about the spread of Asian rust disease in US soybean-growing regions have sparked expectations of a firmer opening for soybean futures on the Chicago Board of Trade (CBOT) on Tuesday. Market participants anticipate a 1 to 3 US cent per bushel increase in CBOT soybean values, driven by speculation that the rust may have spread to additional fields in Louisiana and Mississippi. The soybean complex may benefit from gains in e-CBOT trade and Malaysian palm oil futures, as well as the buying back of previously sold positions.

Key Takeaways:

  • CBOT soybean futures are expected to open 1 to 3 US cents per bushel higher due to concerns about Asian rust disease.
  • Speculation exists that the rust may have spread to three more fields in Louisiana and one in Mississippi.
  • Gains in e-CBOT trade and Malaysian palm oil futures are expected to provide support to the soybean complex.
  • The buying back of previously sold positions may contribute to upward price momentum.
  • Slow farmer selling and resulting firmness in the cash market may provide a firm floor for soybean values.
  • Huge supply of soybeans in the US, absence of fresh demand, and favorable growing conditions for soybeans in Brazil and Argentina will cap upside potential.
  • January CBOT soybean contract has technically gapped higher but backed off the session high to close near the session low on Monday.
  • Multiple closes above $5.50 are needed to give bulls confidence in a near-term low.
  • Resistance for the contract is pegged at $5.41 and $5.48, while support is seen at $5.29 and $5.20.

Statistics:

  • 1 to 3 US cents per bushel: expected increase in CBOT soybean values.
  • $5.50: technical level that would give bulls confidence in a near-term low.
  • $5.41: resistance level for January CBOT soybean contract.
  • $5.48: additional resistance level for January CBOT soybean contract.
  • $5.29: support level for January CBOT soybean contract.
  • $5.20: additional support level for January CBOT soybean contract.

Sources:

  • Resource News International via COMTEX

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