March 3, 2008

 

CBOT Soy Outlook on Monday: 25-30 cents higher on overnight trade, demand news

 

 

Chicago Board of Trade soybean futures are predicted to start day session trading 25 to 30 cents higher Monday, following sharp gains to new all-time highs in overnight activity and supportive demand news from China, an analyst said.

 

In overnight e-CBOT trading, May soybeans jumped 31 cents to US$15.67 1/2 per bushel and November soybeans rose 22 cents to US$14.48. May e-CBOT volume was over 14,000 contracts.

 

Soybeans should open with strong gains based off the overnight strength and overseas news, an analyst said. Palm oil prices surged and China indicated that it will increase imports of agricultural products, the analyst said.

 

Crude palm oil futures rallied to another record high Monday on heavy speculative buying and anticipated demand from India and China, analysts said. The benchmark May contract ended MYR325 higher at MYR4,330 per metric tonne on the Bursa Malaysia Derivative Exchange.

 

China may increase imports of major agricultural commodities to meet rising demand and tame inflation, the country's Minister of Commerce said Monday.

 

The outside inflationary markets are higher, the dollar is lower and the technical picture remains positive as the market continues to set new highs, a commission house analyst said. Based on these factors it appears the market will be well supported by speculative interests, the commission house analyst said.

 

On daily technical charts, July soybeans closed sharply higher Friday and hit a fresh contract and all-time high. Stronger "outside" markets and a weaker U.S. dollar continue to add support to soy complex futures, a technical analyst said. The next upside price objective is to close prices above US$16.00 per bushel, while the next downside price objective is close prices below support at US$15.00.

 

First resistance for July soybeans is seen at Friday's contract high of US$15.48 and then at US$15.75. First support is seen at Friday's low of US$15.25 and then at US$15.00.

 

Deliveries posted against the Chicago Board of Trade March future were 358 contracts Monday. Large issuers included the customer account of Man Profession Clearing which issued 82 contracts, and the customer account of Cunningham Commodities, which issued 167 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 350 contracts. The last trade assigned was Feb. 25.

 

Speculative traders reduced their CBOT long soybean futures and options on futures positions by 9,376 contracts and trimmed their short positions by 3,617 contracts and are now net long 111,610 contracts as of Feb. 26, the CFTC reported Friday in the supplemental commitment of traders report. Index funds trimmed 2,984 contracts from their long positions and 2,096 contracts from their short holdings and are now net long 197,819 contracts, the CFTC said.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange settled higher and at a new record Monday, boosted by surging vegetable oil prices. The benchmark January 2009 contract settled RMB/142 higher to RMB 4,924 per metric tonne.