Pro Farmer’s After the Close 11/8/10

Soybean futures favored a weaker tone today as traders evened positions ahead of tomorrow morning’s USDA reports. Soybeans closed 7 to 9 cents lower, with meal and soyoil seeing spillover support. Strength in the dollar also supplied pressure to the market, but gold posted a new all-time high today, giving the outside markets a mixed influence today. >>>>> More

Soybean Technicals from Reuters

SINGAPORE, Oct. 14 (Reuters) - The CBOT soybean November futures contract <SX0> is expected to rise towards $12.26 per bushel as per its wave pattern and a range between $11.50-¾    and $11.88-3/4.

A wave "5" is progressing towards a medium-term target at $12.80, as pointed by an ascending trendline, while a conservative $12.26 level is considered as a 24-hour target.

Support is at $11.70, a break below which would trigger a further retracement to $11.50-3/4, the low of the range.

Commodities Advance to Two-Year High Led by Agriculture Futures

By Tony C. Dreibus

Oct. 11 (Bloomberg) -- Commodities rose to the highest in two years, led by agriculture futures, after a U.S. Department of Agriculture report last week showed corn production in the country would decline more than expected by analysts.

The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 1.3 percent to 571.4810, the highest level since Oct. 3, 2008. The UBS Bloomberg Constant Maturity Commodity Index climbed to 1,490.731, the highest since Aug. 27, 2008. Corn futures gained as much as 8.5 percent and soybeans jumped to a 16-month high.

U.S. corn production will total 12.664 billion bushels, the U.S. Department of Agriculture said Oct. 8. That’s below the average estimate of 26 analysts surveyed by Bloomberg News for 12.977 billion bushels. Yields will be 155.8 bushels an acre, the USDA said, compared with analysts’ forecast of 160.2 bushels an acre.

“Friday’s news has been exceptionally bullish for the markets,” said Sudakshina Unnikrishnan, an agricultural commodities analyst for Barclays Capital in London. “If one looks at current prices, I don’t think we’re close to peaks. There is still further upside from the current levels.”

Corn futures for December delivery surged 42.75 cents, or 8.1 percent, to $5.71 a bushel at 10:34 a.m. London time on the Chicago Board of Trade. The price has gained 23 percent since Oct. 1.

Barclays forecast the grain’s fourth-quarter average price at $5.24 a bushel before the report, Unnikrishnan said. The first quarter average was expected to be about $5.40 a bushel.

‘See a Scramble’

Soybeans for November delivery rose 43.5 cents, or 3.8 percent, to $11.785 a bushel in Chicago. The price has jumped 7 percent this month. Wheat futures for December delivery gained 8 cents, or 1.1 percent, to $7.2725 a bushel.

With corn prices rising, more growers will plant the grain instead of soybeans and wheat, Unnikrishnan said.

“The fact that corn prices are looking more attractive, we could see a scramble for acres tilting in favor of corn,” Unnikrishnan said. “We see soybean prices needing to push up in terms of planting. In feed substitution with wheat, prices need to push up.”

Sugar for March delivery gained 0.88 cent, or 3.3 percent, to 27.2 cents a pound on ICE Futures U.S. in New York. The price earlier touched 27.24 cents a pound, the highest in almost eight months, on speculation that crops in Brazil, the world’s largest supplier of the sweetener, will be harmed by drought that lasted through mid-September.

Silver for immediate delivery jumped as much as 1.6 percent to $23.6325 an ounce, the highest since March 13, 1980. Silver for December delivery gained 0.8 percent, also extending a rally to a 30-year high.

Gold for immediate delivery rose $1.86, or 0.1 percent, to $1,348.60 an ounce. Futures for December delivery climbed $6.70, or 0.5 percent, to $1,347 an ounce. The most-active contract has gained 23 percent this year.

--Editors: John Deane, Dan Weeks.

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Soybeans Technicals from Reuters

SINGAPORE, Oct.11 (Reuters) - The CBOT soybean November futures contract will rise to $12.20 per bushel as a fierce wave "3" is advancing.

The rally confirmed a wave "3" mode, even though fundamentally the strong bull run was triggered by a cut in the USDA crop forecast.

The bullish momentum may extend into the next few trading sessions, to push the price higher until an obvious bearish reversal signal forms on the daily chart, and until then, the basic assumption will be that the uptrend is intact.

Palm Oil Jumps to 26-Month High on Forecast for Lower Global Soybean Crop

Palm oil futures surged to the highest level in more than 26 months, tracking gains in soybeans, which rallied for a second day after the U.S. Department of Agriculture forecast a smaller global crop. 

The contract for delivery in December jumped as much as 6.5 percent to 2,940 ringgit ($948) a metric ton, the highest level since Aug. 1, 2008, on the Malaysia Derivatives Exchange. Prices gained for a sixth consecutive week last week, the longest winning streak since a seven-week advance ending May 8, 2009.

The U.S. soybean crop will be a record 3.408 billion bushels (92.8 million tons), compared with 3.483 billion projected in September and 3.359 billion gathered last year, the USDA said on Oct. 8. August rains failed to boost yields, prompting the government to reduce its acreage estimates.

“Crude palm oil prices may be ripe for a further upswing given the USDA’s recent downgrade of soybean crop estimates and the threat to oilseeds and edible oil supplies posed by the ongoing 

La Nina,” Ivy Ng, an analyst at CIMB Investment Bank Bhd., said in a report today.

The brokerage raised its forecast for crude palm oil prices by 9 percent to an average 2,630 ringgit a ton this year and as much as 14 percent to 2,800 ringgit for 2011. The price has averaged 2,502 ringgit this year, according to Bloomberg calculations.

Soybean futures for November delivery in Chicago gained as much as 4.4 percent to $11.8475 a bushel in Chicago, the highest price since June 5 last year. The contract traded at $11.775 a bushel at 9:06 a.m. in Mumbai.

Malaysian Exports

December-delivery soybean oil gained as much as 2.2 percent to 47.64 cents a pound in Asia, the highest level since Sept. 29, 2008. Soybean oil and palm oil are direct substitutes.

Malaysia’s palm oil exports fell 0.4 percent in the first 10 days of October to 395,015 tons from the same period in September, independent market surveyor Intertek said today.

On the Dalian Commodity Exchange, palm oil for delivery in May jumped as much as 5.6 percent to 8,184 yuan ($1,226) a ton, the highest level since Aug. 4, 2008. Dalian May-delivery soybean oil surged as much as 4.5 percent to 8,918 yuan.

CME Group Inc.’s December palm oil contract, pegged to the Malaysian benchmark price, surged as much as 5.4 percent to $938.25 a ton, the highest level since the exchange began trading the commodity in May.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net;

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net