February 11, 2008

 

CBOT Soy Outlook on Monday: Down 7-10 cents on overnight weakness

 

 

Chicago Board of Trade soybean futures are called to open day session trading 7 to 10 cents lower Monday, following the losses in overnight trading in what is expected to be a volatile session, analysts said.

 

In overnight e-CBOT trading, March soybeans declined 10 1/4 cents to US$12.28 3/4 per bushel and November soybeans slipped 3 cents to US$12.82. March E-CBOT volume was over 11,000 contracts.

 

Soybeans were lower in overnight trade and should begin the session on the defensive, a commission house analyst said. Technically, recent trade has been poor and it appears that improved weather in Argentina's soybean growing regions will also act to limit attempts to move to the upside, the analyst said.

 

Although U.S. wheat futures were sharply higher overnight after the Commodity Futures Trading Commission increased the daily price limits for wheat futures to 60 cents per bushel from 30 cents, effective in the overnight session, it appears the bulls news in MGE spring wheat might be fully factored into the markets, the analyst said.

 

In overnight trade, both MGE and KCBT nearby March contracts rose 60 cents per bushel, while CBOT March wheat ended 55 cents higher.

 

With the expanded price limits in place, there is a feeling is that Minneapolis wheat will trade freely by mid-week, a trader said.

 

In South America, weekend rains favored filling soybeans in Brazil's southern sections, though rains in northern area might delay the harvest, DTN Meteorlogix Weather said. There is a chance for light showers Tuesday in Parana, with drier weather expected Wednesday.

 

In Argentina, generally favorable conditions are seen for corn due to recent rains and no severe heat. Mainly dry weather is forecast through Wednesday near to above normal west and below normal east Tuesday and Wednesday, Meteorlogix Weather said.

 

On daily technical charts, March soybeans closed higher but nearer the session low Friday. The contract did close at a fresh contract high and weekly high close, a technical analyst said. Market bulls still have a solid near-term technical advantage but the higher volatility and recent low-range closes after early-session strong price up moves should be a bit worrisome to the bulls, the analyst said. The next upside objective for the bulls is to push and close prices above solid resistance at Friday's contract and all-time high of US$13.74 1/2 per bushel. The next downside price objective for the bears is pushing prices below psychological support at US$13.00.

 

First resistance for March is seen at Friday's high of US$13.74 1/2 and then at US$14.00. First support is seen at US$13.31 1/2, Friday's low and then at US$13.12.

 

In overseas markets, crude palm oil futures settled higher amid thin trading, staging a late recovery. The benchmark April contract on the Bursa Malaysia Derivatives Exchange ended up MYR27 at MYR3,412/tonne.

 

Large commercial traders increased their short Chicago Board of Trade soybean futures and options on futures positions by 9,069 contracts and cut 9,808 contracts from their long positions and are now net short 271,449 contracts as of Feb. 5, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Large speculative traders added 11,587 contracts to their long positions and increased their short positions by 2,263 contracts and are now net long 117,775 contracts the CFTC said. Index funds increased their long positions by 7,466 contracts and added 57 contracts to their short positions and are net long 190,990 contracts, the CFTC said.

 

Soybean futures on China's Dalian Commodities Exchange remain closed due to the Lunar New Year holiday.