January 11, 2010
CBOT Soy Outlook on Monday: Seen up; weaker dollar, pre-report positioning
Soybean futures on the Chicago Board of Trade are expected to start Monday's day session higher, buoyed by a weaker U.S. dollar and trade positioning ahead of Tuesday's crop reports from U.S. Department of Agriculture.
CBOT soybean futures are seen starting 2 cents to 4 cents higher. In overnight trade, January soybeans were 4 cents higher at US$10.17, and March soybeans were 1 1/2 cents higher at US$10.23 1/2.
The market is expected to get a boost from a lower U.S. dollar, still reeling from the effects of Friday's disappointing U.S. payrolls data, analysts said. The Dollar Index, a gauge of its value against a basket of currencies is on the defensive in early Monday action.
The declines in the dollar is providing some broad based commodity strength, with crude oil and metal futures producing solid overnight gains.
Traders are expected to even up positions ahead of Tuesday's USDA reports following last weeks' declines, with participants anticipating index fund rebalancing to generate buying as well.
Otherwise, traders are seen taking a cautious approach, waiting to see what the market is made of once USDA's updates on production, supply/demand and stocks data is digested, a CBOT floor analyst said.
USDA will release its final 2009 production forecast, supply and demand revisions and quarterly stocks reports Tuesday, 8:30 a.m., EST. The average of analysts' estimates anticipates U.S. soybean production for the 2009-10 marketing year at 3.337 billion bushels versus 3.319 billion in the USDA's November report. The average of analyst's estimates peg soybean ending stocks at 237 million bushels, down 18 million from December's forecast.
A technical analyst said first resistance for March soybeans is seen at Friday's high of US$10.29 and then at US$10.40. First support is seen at Friday's low of US$10.13 1/4 and then at US$10.00.
USDA is scheduled to release its weekly export inspections report at 11 a.m., EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday, as the dollar's weakness helped commodities to rebound. The September 2010 soybean contract settled RMB35, or 0.9%, higher at RMB4,035 a metric tonne.
Meanwhile, China's soybean imports in December rose 45% from a year earlier to 4.78 million metric tonnes, the General Administration of Customs said Sunday. The December imports were up 65% from the month before. For the full year of 2009, soybean imports rose 13.7% to 42.55 million tonnes.
