February 22, 2010

 

CBOT Soy Outlook on Monday: Higher on dollar weakness, Argentina rains

 

 

Supportive outside market influences with a weaker U.S. dollar and light concerns about heavy rains in Argentina are seen underpinning Chicago Board of Trade soybean futures to start Monday's day session.

 

CBOT soybeans are seen opening 5 cents to 7 cents higher.

 

Overnight, CBOT March soybeans ended 7 3/4 cents higher at US$9.52 3/4 a bushel, and May soybeans were 7 1/2 cents higher at US$9.62.

 

In the absence of fresh fundamental news to lend direction, futures are taking a little encouragement from outside markets to edge higher, said Victor Lespinasse, analyst with Grainanalyst.com.

 

Reports of heavy weekend rains in Argentina possibly threatening their soybean crop serves as a talking point to aide the bullish theme.

 

However, South American crops are still expected to be record large, limiting the price strength from the Argentine crop worries, traders added.

 

Meanwhile, futures are expected to remain in a consolidative phase, with short covering and technical buying expected to buoying prices while bearish world supply outlooks caps upside potential.

 

A technical analyst said market bears have the overall near-term technical advantage, with the next downside price objective for May soybeans is pushing and closing prices below solid technical support at the February low of US$9.11. The next upside technical objective is pushing and closing March prices above major psychological resistance at US$10.00.

 

The DTN Meteorlogix weather forecast said heavy thunderstorms may have caused severe flooding in local areas early in the weekend. Rains, in general, will favor filling crops but will be unfavorable for any early harvests.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday, along with a strong rise in external markets. The September 2010 soybean contract settled up RMB36 or 1.0% at RMB3,816 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday, snapping a two-day losing streak and rising to their highest level in six weeks amid a broad-based rally across most asset classes, said trade participants. The May CPO contract on the Bursa Malaysia Derivatives ended MYR35 higher at MYR2,631 a metric tonne

 

Rotterdam soybean prices were mostly lower while soymeal prices were steady to higher. European vegoil prices were mixed.