January 25, 2010

 

CBOT Soy Outlook on Monday: Mixed; consolidating, quiet news front

 

 

Chicago Board of Trade soybean futures are expected to begin Monday's day session in mixed fashion, continuing to consolidate in the absence of fresh market moving news.

 

CBOT soybean futures are seen starting 1 cent higher to 1 cent lower. In overnight trade, March soybeans were 1 1/2 cents, or 0.16%, lower at US$9.50, and May soybeans were 2 1/4 cents, or 0.26%, lower at US$9.57.

 

A quiet news front and mixed signals from outside markets aren't providing any clear directives for prices, said Victor Lespinasse, analyst with Grainanalyst.com.

 

The U.S. dollar index and crude oil futures are slightly lower, while metal and stock index futures are higher in early market action.

 

Futures are seemingly settling into their winter doldrums, with the market void of any key government crop data until the March.

 

However, underlying support is seen from mounting concerns about heat and dryness for Argentina crops as they move into their key development month of February, Lespinasse said.

 

Nevertheless, South America remains on track for record production with Brazil crops continuing to benefit from favorable growing conditions, he added.

 

Traders will eye technical factors after futures absorbed heavy chart losses in the previous three weeks.

 

A technical analyst said first resistance for March soybeans is seen at Friday's high of US$9.57 and then at US$9.71. First support is seen at Friday's low of US$9.45 1/2 and then at last week's low of US$9.40 3/4.

 

The DTN Meteorlogix weather forecast said favorable conditions for developing soybeans are on tap for the major growing areas of Brazil with no significant heat or dryness indicated.

 

In Argentina, a hot, dry weather pattern continues to develop over central and southern agricultural areas. Soils will continue to dry out with increasing stress to crops in the next seven days, as temperatures exceed 95 degrees Fahrenheit in Cordoba, La Pampa and western Buenos Aires, Meteorlogix said

 

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 on the Dalian Commodity Exchange on Monday due to a technical rebound as well as restored confidence that government policies would continue to support agricultural prices. The September soybean contract settled RMB35 or 1% higher at RMB3,907 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended up Monday due to higher exports and a likely decline in production, trade participants said. The April CPO contract on the Bursa Malaysia Derivatives ended MYR14 higher at MYR2,469 a metric tonne.