February 25, 2008

 

CBOT Soy Outlook on Monday: Up 20-30 cents; demand, bullish momentum

 

 

Chicago Board of Trade soybean futures are expected to open Monday's day session sharply higher, soaring to new heights on follow through speculative buying amid strong world demand.

 

CBOT soybean futures are called to start the session 20 to 30 cents higher.

 

In overnight electronic trading, March soybeans were 26 3/4 cents higher at US$14.46 3/4, May soybeans were 26 1/4 cents higher at US$14.64 1/2, July soybeans were 27 cents higher at US$14.79 3/4, and November soybeans were 22 1/2 cents higher at US$14.13.

 

CBOT futures set new contract and all-time highs in overnight trade.

 

Continued concerns over increased demand for soybean and soyoil supplies amid talk around the world of exporting countries slowing exports in an effort to control food inflation, continues to promote bullish enthusiasm, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Technically inspired buying remains a feature as sellers stay on the run as prices continue to push above contract highs, analysts said.

 

Broad based strength in commodities in general, with higher metal and energy futures, a record one day gain in Malaysian palm oil and advances in neighboring grains aide the supportive tonnee, traders added.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above major psychological resistance at US$15.00 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$14.00.

 

First resistance for July soybeans is seen at Friday's contract high of US$14.54 and then at US$14.75. First support is seen at Friday's low of US$14.33 and then at last week's low of US$14.14 1/2.

 

Index funds raised their net long CBOT soybean futures and options positions combined, which now total 198,707 contracts as of Feb. 19, up from 192,657 the prior week, according to Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Traditional large speculative traders were net long 117,369 contracts compared with net longs of 114,355 in the previous week. Commercials held net short combined futures and options positions totaling 284,309 contracts, up from the previous week's 269,361 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 importers booked nine to 11 cargoes of fresh soybeans from South America in the week ended Feb. 22, according to a report Monday by commodities analysis firm Shanghai JCI. The soybeans are expected to be delivered in April, May and June, said the report.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled at new highs Monday, buoyed by expectations of strong demand for edible oil. The benchmark September 2008 soybean contract settled CNY125 higher at CNY5,199 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange set a new all-time closing record Monday on a bullish outlook for palm oil made at an international vegetable oils conference in Kuala Lumpur, said trade participants. The benchmark May palm oil contract ended MYR168 up at MYR3,866 a metric tonne.