January 4, 2010

 

CBOT Soy Outlook on Monday: Up 13-15 cents; bullish macro market influences

 

 

Soybean futures on Chicago Board of Trade are expected to start Monday's day session higher, kicking off the New Year on firm footing as strength from bullish macro market influences support prices.

 

CBOT soybean futures are seen starting 13 to 15 cents higher. In overnight trade, January soybeans were 13 cents higher at US$10.52 3/4, and March soybeans were 14 cents higher at US$10.62 1/2.

 

The combination of weakness in the U.S. dollar, strength in crude oil futures and the bounce in gold futures is seen attracting fresh money flow into grain and oilseed futures.

 

"The anticipation of new investment money entering the market as index funds rebalance positions in commodities to start the year is expected to buoy prices," said Victor Lespinasse, analyst with Grainanalyst.com.

 

An otherwise quiet news front is expected to keep attention on outside markets. However, good underlying export demand and the potential for a pickup in soymeal feed use due to an arctic blast moving across the central U.S. provides some fundamental support.

 

Nevertheless, speculative fund support will be relied on for upward strength, as favorable conditions for potentially record South American crops remain bearish features, Lespinasse added.

 

A technical analyst said first resistance for March soybeans is seen at US$10.50 and then at Thursday's high of US$10.61 1/2. First support is seen at Thursday's low of US$10.41 1/4 and then at US$10.98 3/4.

 

The DTN Meteorlogix weather forecast said favorable conditions for developing soybeans throughout the major growing areas of Brazil with no significant heat or dryness indicated. In Argentina, favorable conditions for developing corn and soybeans and any remaining planting with no significant heat or dryness indicated.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST.

 

In overseas markets, soybean futures rose Monday on the Dalian Commodity Exchange, supported by weather-related concerns and macroeconomic signals from the government. The September soybean contract settled 1.1% higher at RMB4,069 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday, tracking soyoil and crude oil futures in Asian trade, participants said. The March contract on the Bursa Malaysia Derivatives ended MYR17 higher at MYR2,680 a metric tonne.