CBOT Soy Outlook on Monday: Up 14 -16 cents on Argentina weather outlooks

 

 

Chicago Board of Trade soybean futures are expected to open Monday's day session higher, buoyed by the fundamental impact of a return to drier Argentina weather conditions this week.

 

CBOT soybean futures are called 14 cents to 16 cents higher.

 

In overnight electronic trading, March soybeans finished 16 3/4 cents higher at US$10.25 3/4. March soymeal was US$4.00 higher at US$322.30 per short tonne, while March soyoil ended 40 points higher at 34.00 cents per pound.

 

Forecasts for a high pressure system to build back in Argentina, with the next chance of rain not emerging until next week have traders adding risk premium back into prices, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

The absence of the U.S.'s largest buyer, China, this week due to the Lunar New Year holidays will keep traders focused on weather, analysts said.

 

Prices are expected to push toward to the top end of the market's recent trading range, as sellers take a cautious approach in the absence rain chances in Argentina, Roose said. Support from weakness in the U.S. dollar is seen aiding the advances as well.

 

A technical analyst said the next upside price objective for March soybeans is to push and close prices back above solid technical resistance at the January high of US$10.60 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the January low of US$9.57 3/4 a bushel.

 

First resistance for March soybeans is seen at Friday's high of US$10.34 1/4 and then at US$10.37. First support is seen at US$10.00 and then at US$9.91 1/2.

 

The DTN Meteorlogix weather outlook said rainfall activity was about as expected in Argentina during the weekend period. Near to below normal temperatures with some additional light showers with isolated heavier the first half of this week will maintain a less stressful situation for crops. However, it does not appear that the overall weather pattern that have produced some of the most stressful conditions to summer crops in years has changed enough to prevent further stress on crops during the coming weeks, Meteorlogix said.

 

Index funds increased their net long positions in CBOT soybean futures and options combined to 95,723 contracts, up from 95,245 the prior week according to the Commodity Futures Trading Commission in its supplemental commitments of traders report released Friday.

 

Large speculative traders now hold 19,856 net long positions in CBOT soybean futures and options combined contracts as of Jan. 20, compared with net longs of 23,661 in the previous week, according to CFTC. Commercials held net short combined futures and options positions totaling 94,505 contracts, down from the previous week's 97,560 contracts, as reported in the CFTC supplemental report.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange will be closed from Monday to Feb. 1. The exchange is closed for the Chinese New Year holiday.

 

Asian crude palm oil on Malaysia's derivatives exchange was closed Monday for public holidays.