Soybeans Rally on “Turnaround Tuesday”
It appears that bulls took the Columbus Day holiday off, as pent-up buying emerged throughout a good portion of the commodity markets this morning – especially Soybeans. Traders noted fresh speculative buying once yesterday’s highs of $8.39 ¼ were taken out during the opening minutes of the day session. The weekly USDA export inspections report was mildly supportive to Soybeans, with 17.998 million bushels inspected for the week ending October 4th – up from the 13.617 million bushels reported the previous week and well in line with pre-report estimates. The recovery in Wheat futures from sharply lower levels overnight was also deemed a positive factor by Bean traders. Hot and dry weather in the Soybean-growing regions of Brazil is a deterrent to early planting by producers, as adequate soil moisture is needed to get the crop off to a good start. Support for November Soybeans is seen at $9.19, with resistance found at the 20-day moving average, currently at $9.65 ½. November Soybeans closed at $9.50 ¼, up 24 ¾.
Gold futures rebounded after a lower start to the session, as the U.S. Dollar curtailed some of its gains against the Euro, and Oil futures rallied back above $80 per barrel to spark fresh buying by investors looking for an inflation hedge. Metal traders will also be awaiting the details from the minutes of the September 18th FOMC meeting for clues on whether Fed governors are poised to make further interest rates cuts this year. The September meeting saw the Fed cut the Discount and Fed Funds rates by 50 basis points each on concerns of a slowdown in the U.S. economy due to the recent short-term credit crunch. If it appears that the Fed is wont to make further rate cuts, this could be construed as “inflationary” and act to support Gold prices. Support for December Gold is currently seen at the recent lows of $726.30, with resistance found at $750.70. December Gold closed at $743.10, up $4.40.
Mike Zarembski, Senior Commodity Analyst
