March 8, 2010

 

CBOT Soy Outlook on Monday: Seen up; dollar weakness lends support

 

 

Chicago Board of Trade soybean futures are expected to start Monday's day session firmer, recovering from last week's declines on supportive outside market influences.

 

A limited amount of fresh fundamental news impacting prices is keeping futures following the lead of outside markets, with a weaker U.S. dollar opening the door for higher prices, analysts said.

 

A lower U.S. dollar supports commodity prices due to perceptions it increases investors' appetite for risk and makes U.S. grain cost less in world markets.

 

CBOT soybeans are seen opening 2 cents to 4 cents higher.

 

Overnight, CBOT March soybeans ended 4 cents higher at USUS$9.38 3/4 a bushel, and May soybeans were 3 1/4 cents higher at USUS$9.46.

 

The market is seen retracing some of last week's declines, finding support from position evening ahead of Wednesday's supply and demand reports.

 

However, upside potential is expected to stay limited in the face of a record South American soybean harvest and slowing U.S. export demand.

 

Meanwhile, soyoil is expected to continue to gain in the overall value share of the soybean crush amid the narrowing of the differential between soyoil and crude palm oil prices and slowing demand for U.S. soymeal.

 

A technical analyst said the next downside price objective for May soybeans is pushing and closing prices below solid technical support at the February low of USUS$9.11. The next upside technical objective is pushing and closing May prices above solid technical resistance at last week's high of USUS$9.63.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST. USDA will release its March supply and demand report Wednesday at 8:30 a.m. EST.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday, rising with external markets amid widespread gains in global commodities and equities. The September 2010 soybean contract settled up RMB14, or 0.4%, at RMB3,836 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday as participants anticipated bullish news from a palm oil conference due to start tomorrow, trade participants said. The May contract on the Bursa Malaysia Derivatives ended MYR39 higher at MYR2,709 a metric tonne.