January 28, 2008

 

CBOT Soy Outlook on Monday: Down 8-10 cents; weak outside market influences

 

 

Soybean futures on the Chicago Board of Trade are poised for a lower start to Monday's day session, following the weak overnight theme, with declines in world equity markets raising fears in the marketplace, analysts say.

 

CBOT soybean futures are called to start the session 8 to 10 cents lower.

 

In overnight e-CBOT trading, March soybeans were 10 1/4 cents lower at US$12.32 3/4, July soybeans were 9 1/4 cents lower at US$12.66, and November soybeans were 10 1/4 cents lower at US$12.21 3/4.

 

The jitters associated with the stock market continue to produce a cautious trading atmosphere, with traders leery of possible fund liquidation on recessionary fears, analysts said.

 

Favorable weekend weather in South America is seen adding some pressure to prices, with light selling associated with traders evening up some positions before margins on CBOT soybeans are raised at the end of the day aiding the lower theme, a CBOT floor broker said.

 

Otherwise, the market will be forced to deal with mixed outside influences, with lower crude oil prices and a mixed tone in precious metal futures failing to provide a clear path for the market, he added.

 

A technical analyst said the next downside price objective for market bears is pushing and closing March soybean prices below major psychological support at US$12.00. First resistance for March soybeans is seen at Friday's high of US$12.53 and then at US$12.65. First support is seen at Friday's low of US$12.26 1/2 and then at US$12.18.

 

The DTN Meteorlogix Weather Service said scattered showers and moderate temperatures are easing stress to developing corn and soybeans in the major growing currently, especially for Cordoba province. However dry conditions have not ended with a return to warm, dry weather expected during the latter half of this week. More rain will be needed in the coming weeks for filling corn and soybeans, Meteorlogix added.

 

Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds held net long positions totaling 179,290 combined CBOT soybean futures and options contracts as of Jan. 22, up from 176,461 the prior week. Traditional large speculative traders were net long 104,331 contracts compared with net longs of 114,406 in the previous week. Commercials held net short combined futures and options positions totaling 246,652 contracts, down from the previous week's 263,347 contracts.

 

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

 

In other news, Chinese soybean traders booked 15-17 soybean cargoes, mostly from South America, in the week ended Jan. 25, up from 10-11 cargoes in the previous week, commodities analysis firm Shanghai JCI said in an analyst report late Friday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled little changed Monday on a lack of fresh news, with analysts expecting consolidation to continue before the Chinese New Year holiday in early February. The benchmark September 2008 soybean contract fell RMB4 to settle at RMB4,624 a metric tonne, after trading between RMB4,595/tonne and RMB4,651/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange fell sharply Monday after heavy afternoon selling on a possible rise in inventories, weak export numbers and taking cues from losses in soyoil and crude oil futures, said trade participants. The benchmark April contract on Bursa Malaysia Derivatives ended MYR105 lower at its intraday low of MYR3,150 a metric tonne.