January 16, 2007

 

CBOT Soy Outlook on Tuesday: Seen up 3-5 cents; e-CBOT; corn spillover

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session higher, following overnight action as the market feeds off the bullish theme in corn futures.

 

Soybean futures are called to open 3 to 5 cents higher.

 

In e-CBOT trade, March was 3 1/4 cents higher at US$7.19 3/4 per bushel. Price strength in CBOT corn futures will continue to provide direction, as soybeans are seen remaining in the vacuum of bullish momentum from corn, a CBOT floor analyst said.

 

Technically inspired buying is expected to be a featured attraction amid a quiet news front. Traders anticipate fresh buying to emerge if corn locks limit up once again, with buyers looking to other grains and oilseeds to buy into if they are unable to trade corn, an analyst added.

 

A technical analyst said market bulls are back in full technical command after seeing a bullish upside "breakout" from a two-month-old sideways trading range at higher price levels on the daily chart Friday. The next upside price objective for March soybeans is to close prices above solid longer-term technical resistance at the 2005 high of US$7.52 1/4 a bushel. The next downside price objective is closing prices below major psychological support at US$7.00.

 

First resistance for March soybeans is seen at Friday's contract high of US$7.23 3/4 and then at US$7.30. First support is seen at US$7.10 and then at US$7.06.

 

The National Oilseed Processors Association reported its members crushed 149.162 million bushels of soybeans during December. The figure was just above the average trade estimate of 148.7 million bushels, and the 148.2 million NOPA reported for the month of November. Estimates for the report ranged from as low as 145.4 million bushels to as high as 150.5 million bushels. Soyoil stocks decreased to 2.605 billion pounds, down from the revised November stocks figure of 2.694 billion. The average of trade estimates projected stocks at 2.735 billion pounds.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds were reported to hold net long positions totaling 130,193 combined soybean futures and options contracts as of Jan. 9, up from 129,727 in the prior week. Traditional large speculative traders were net long 42,566 contracts. Index funds are net long combined soyoil futures and options positions to the tune of 68,478 contracts, up from the previous week's 67,869 lots. Speculative funds were reported net long 38,780 lots. Large speculative traders were reported net long combined futures and options positions in soymeal by 7,645 lots, compared with net longs of 12,311 contracts last week.

 

On tap for Tuesday, the U.S. Department of Agriculture is scheduled to release its weekly export inspection report at 11:00 a.m. EST.

 

In deliveries, soymeal delivery notices totaled 401 lots, with the house account at Bunge Chicago issuing 334 lots and the house account at Term Commodities stopping 166 lots. The last trade date assigned was Jan. 12. Fifteen delivery notices were posted against the January soyoil futures. The last trade date assigned was Jan. 11.

 

Rotterdam soybeans were higher and soymeal were lower. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, largely because of sluggish demand for soybean products on China's cash markets and increased import volumes the past several days, analysts said. The benchmark May 2007 soybean contract settled RMB20 lower at RMB2,920 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher after a choppy trading day Tuesday, with initial concerns about weak exports overshadowed by the positive influence from a rally in corn futures, analysts said. The benchmark April CPO contract ended at MYR1,947 a metric tonne, up MYR23 from Monday.