Profit Taking Hits Soybean; Crude Gives Palm Oil The Slip

May Soybeans - After some pre-reported short-covering helped Soybeans close slightly higher for the second day in a row, some profit taking activities has begin to set in.
However, the recent higher close has also set up a potentially bearish reaction swing under the 20-day SMA. A confirmation of this pattern will portend a new downward leg in the bearish cycle, with a new test of the descending Andrew's Pitchfork median line.

CPO FUTURES : Palm Oil Down 2%
MALAYSIAN crude palm oil futures fell more than 2 per cent yesterday, as investors sold on concerns over the outlook for prices after a bearish forecast from a top industry analyst on rival soybean stocks, traders said.

The benchmark May crude palm oil futures on the Bursa Malaysia Derivatives Exchange ended down RM59, or 2.18 per cent, at RM2,650 it a tonne on the day.

"Mistry gave a bearish view on soybean stocks which prompted people to sell and bring the market down," a trader at a local brokerage in Kuala Lumpur said.

Overall traded volume was 10,742 lots at 25 tonnes each.

Palm oil futures on the Bursa Malaysia Derivatives Exchange are forecast to trade between RM2,600 and RM2,800 a tonne in March-July on high global vegetable oil stocks due to large soybean oil supplies from South America, Dorab Mistry of India's Godrej Industries Ltd said in his forecast.

But crude palm oil futures may trade in the RM2,800-RM3,200 range after July as the current El Nino-driven hot weather causes production shortfalls in the second half of 2010, Mistry added.

The market was also awaiting direction from the Malaysian Palm Oil Board which is due to release data on February palm oil stock, production and exports on Wednesday (today), with traders expecting bullish numbers.

"It depends how much stocks we have at end-February and how much carry over in production for March. I think that would bring the market higher," another trader said.

Softening crude oil prices also added to the bearish sentiment. Crude oil futures fell US$1 (US$1 1.00 = RM3.34) per barrel on both sides of the Atlantic yesterday, slipping from eight-week highs, ahead of industry data expected to show another rise in US crude inventories.