February 6, 2006

 

CBOT Soy Outlook on Monday: Up 1-3 cents on follow-through buy, overseas

 

 

Soybean futures at the Chicago Board of Trade were called to open up 1-3 cents per bushel Monday on follow-through buying after last week's gains and firm overseas soy prices, brokers said.

 

"Nothing fundamental is driving this rally, but we'll have to watch the funds and see if we have any additional fund money or if there is some consolidation," one veteran CBOT soy analyst said Monday.

 

In overnight screen trade, the e-cbot March soybean contract settled up 1 3/4 cents at $5.96 1/2 a bushel. March soymeal ended up 30 cents a short tonne at $184.30, and March soyoil closed up 0.07 cent at 22.73 cents a pound.

 

A close below $5.75 in the CBOT March soybean contract would empower the bears and open the door to another leg down in prices, a technical trader said.

 

First resistance for March soybeans was seen at $5.98 1/2 - Friday's high - and then at $6.03 1/2 - last week's high. First support was seen at $5.90 and then at $5.85, he noted.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended Jan. 31 decreased short holdings by 3,940 lots to hold 72,271 short positions and increased their long holdings by 3,704 lots to hold 58,411 long positions.

 

For CBOT soybean futures and options combined, speculators were short 66,105 lots, down 9,139 contracts from the week before, and long 59,294 contracts, up 2,126 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended Jan. 31 boosted short positions but remained net long. They increased their long holdings by 345 lots to hold 21,248 long positions and increased their short holdings by 1,092 lots to hold 18,229 short positions.

 

For CBOT soymeal futures and options combined, speculators were long 22,002 lots, up 424 contracts, and short 18,091 contracts, up 945 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended Jan. 31 decreased their net short position, cutting short holdings by 2,996 lots to 37,909 lots and decreasing long holdings by 422 lots to 28,209 lots.

 

For CBOT soyoil futures and options combined, speculators also cut their net short position, decreasing short holdings by 2,914 lots to 37,733 contracts and increasing long holdings by 2,130 lots to 22,765 lots.

 

U.S. Midwest cash soybean basis bids were mostly steady to weak early Monday, cash dealers said. Spot cash soybean bids were down 8 cents in St. Louis, 5 cents in Sioux City, Iowa, and 2 cents in Chicago, they noted.

 

In Brazil, hot weekend temperatures increased crop stress, but rains were noted during the past 24 hours and more rain is likely this week, according to Joel Burgio, meteorologist at Meteorlogix weather service.

 

In Argentina, good rains late last week and early in the weekend should have helped the crop, Burgio said. Forecasts called for dry conditions this week but slightly cooler temperatures.

 

At the Dalian Commodity Exchange, soybean futures settled sharply higher Monday after a week-long holiday break, tracking last week's rally on CBOT, analysts said.

 

The rally was also attributed to global bullish sentiment toward commodities and spillover effects from local fuel oil and copper futures, they noted.

 

The benchmark DCE May 2006 soybean contract settled RMB81 higher at RMB2,774 a metric tonne; the benchmark DCE May 2006 soymeal contract rose RMB83 to settle at RMB2,403/tonne; and the DCE September 2006 soyoil contract rose RMB106 to settle at RMB5,214/tonne.

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended higher Monday, boosted by gains Friday at the CBOT, with the benchmark contract breaching a key resistance. April CPO contract ended at MYR1,451 a metric tonne, up MYR13 from Friday.

 

In Rotterdam, spot soybean and soymeal prices were higher Monday, cash sources said.