March 2, 2009

Chicago Board of Trade soybean futures are expected to start Monday's day session lower, pressured by bearish outside economic influences.

 

CBOT soybean futures are called 10 cents to 12 cents lower.

 

In overnight electronic trading, March soybeans finished 13 1/4 cents lower at US$8.61 1/4, and May soybeans were 12 cents lower at US$8.60. May soymeal was US$4.60 lower at US$265.20 per short tonne, while May soyoil ended 45 points lower at 30.66 cents per pound.

 

The economy is weighing heavy on broader markets, with weakness in stock indexes and crude oil in conjunction with a firmer U.S. dollar serving as catalysts to keep buyers on the run, analysts said.

 

A quiet news front is expected to keep attention on financial markets, as traders remain in a cautious mode awaiting signs of stability in the economy. The move of large speculative traders to net short positions in CBOT soybeans is seen as another bearish near term indicator for prices, analysts said.

 

Meanwhile, news of fresh Chinese demand may provide support to limit downside risks, a CBOT floor trader said.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of soybeans for delivery to China during the 2008/2009 marketing year, the USDA said Monday.

 

Looking at technical charts, the next upside price objective for May soybeans is to push and close prices back above psychological resistance at US$9.00 a bushel. The next downside price objective is pushing and closing prices below solid technical support at Friday's low of US$8.49 a bushel.

 

First resistance for May soybeans is seen at Friday's high of US$8.77 and then at US$8.91. First support is seen at US$8.65 and then at US$8.58.

 

Large speculative traders now hold 1,379 net short positions in CBOT soybean futures and options combined contracts as of Feb. 24, compared with net longs of 8,202 in the previous week, according to the Commodity Futures Trading Commission in its supplemental commitments of traders report.

 

Index funds trimmed their net long positions in CBOT soybean futures and options. The combined number fell to 96,188 contracts from 98,045 the prior week, according to CFTC in its supplemental commitments of traders report released Friday. Commercials held net short combined futures and options positions totaling 72,232 contracts, down from the previous week's 82,061 contracts, as reported in the CFTC supplemental report.

 

March soymeal deliveries totaled 2 lots. The last trade date assigned was Dec. 4.

 

March soyoil deliveries totaled 1,682 lots. Issuers and stoppers were scattered among various commission houses, with Bunge Chicago issuing 221 lots. The last trade date assigned was Feb. 27.

 

On tap for Monday, USDA is scheduled to release its weekly export inspections report at 11 a.m. EST.

 

In other news, Argentina's old-crop soybean stocks total 5.5 million metric tonnes, the Buenos Aires Cereals Exchange said in a special report Friday. Analysts had estimated there are still between 4 million and 9 million metric tonnes of soybeans still sitting in silos and plastic bags across the Pampas.

 

India's soymeal exports in the marketing year ending September 2009 are likely to fall 20% to around 4 million metric tonnes, from an earlier estimate of over 5 million tonnes, a senior industry official said Monday.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled marginally higher Monday as bargain hunting and short covering kicked in after Friday's sharp fall. The benchmark September 2009 soybean contract edged up 0.1% to settle at RMB3,397 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday after exports hit an eight-month low, damping market sentiment. The benchmark May contract on the Bursa Malaysia Derivatives ended MYR24 lower at MYR1,871 a metric tonne.