February 12, 2007

  

CBOT Soy Outlook on Monday: Mixed start on overnight tone

  

 

Chicago Board of Trade soybean futures are expected to start Monday's day session mixed on slight losses overnight but with possible spillover strength from neighboring grains markets, sources said.

 

In e-cbot overnight trade, March soybeans were down 3/4 cent at US$7.48 1/2 per bushel. CBOT corn and wheat futures, however, trended higher overnight and may lend support to soybeans, a floor broker noted.

 

With little fresh news out, soybeans also will be looking to outside markets for direction, the broker added. Crude oil, silver and gold all are lower are offering no spillover strength, he said.

 

Still, soybeans remain technically strong after recent advances, traders said.

 

March soybean prices Friday closed near the session high, scored a bullish "outside day" up on the daily bar chart and hit a fresh contract high, a technical analyst said.

 

"The bulls have solid upside momentum on their side, amid fresh fund and index fund buying," he said

 

Index traders were net long 135,842 combined CBOT soybean futures and options contracts as of Feb. 6, up from 133,886 in the prior week, the Commodity Futures Trading Commission reported Friday. Traditional large speculative traders were net long 84,901 contracts, up from 71,437 contracts the previous week, the CFTC said.

 

Index funds were net long combined soyoil futures and options positions by 72,038 contracts, up from the previous week's 67,655 lots, the CFTC said. Speculative funds were net long 64,304 soyoil contracts.

 

Large speculative traders were reported net long combined futures and options positions in soymeal by 39,350 lots, compared with net longs of 33,566 contracts last week, according to the CFTC.

 

The next major upside price objective for the bean bulls is to close prices above solid psychological resistance at US$8.00, the technical analyst said. The next downside price objective for the bears is closing prices below solid support at US$7.30.

 

First resistance for soybeans is seen at the contract high of US$7.57 and then at US$7.60. First support is seen at US$7.45 and then at US$7.40.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Monday, tracking Friday's CBOT gains.

 

China's soybean imports in January rose 43.8% on year to 2.43 million metric tonnes, according to preliminary data issued by the General Administration of Customs.

 

Crude palm oil futures on the Bursa Malaysia Derivatives, meanwhile, ended lower Monday, with the benchmark contract falling below a key psychological level, as a slew of data was greeted with disappointment. Supply and demand numbers released through the course of the day failed to inspire market participants, traders said.

 

In other news, persistent rainfall over Brazil's center-west soy belt will lead to crop losses in Mato Grosso state, market analysts said Monday.

 

"There is a lot of soy ready to harvest in north Mato Grosso but the rain is not letting up in many areas," said Flavio Franca, a soy market analyst at Safras and Mercado. "It's reached a point where the excess rain is becoming alarming and we can be more sure about reductions coming in the region's crop estimate."

 

South Korea's CJ Corp. has bought 55,000 metric tonnes of Brazilian soybeans from trading house Marubeni at a tender concluded Friday, a trader in Seoul said Monday.