March 9, 2009

Chicago Board of Trade soybean futures are seen starting Monday's day session higher, following the overnight theme, with firm cash basis levels an underpinning feature, analysts said.

 

CBOT soybean futures are called 4 cents to 6 cents higher.

 

In overnight electronic trading, March soybeans finished 7 1/2 cents higher at US$8.86 1/2, and May soybeans were 5 1/4 cents higher at US$8.72 1/4. May soymeal was US$0.70 higher at US$266.00 per short tonne, while May soyoil ended 33 points higher at 31.36 cents per pound.

 

Very tight cash markets amid limited farmer selling at current levels are providing the support for futures to stave off weak outside market influences, said Don Roose, president U.S. Commodities.

 

Crude oil and equity futures are lower in early action, with the U.S. dollar higher.

 

Light evening of positions heading toward Wednesday's U.S. Department of Agriculture supply and demand report is seen aiding the firmer tone, but the influence of outside markets may limit upside potential.

 

Meanwhile, traders will remain in a cautious mood in the absence of fresh news. However, the trade will remain on guard for a short covering bounce on any bullish development amid the net short positions of large speculative non index funds, Roose said.

 

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 last week's low of US$8.38 1/4 a bushel.

 

First resistance for May soybeans is seen at Friday's high of US$8.74 3/4 and then at US$8.85. First support is seen at Friday's low of US$8.50 1/2 and then at US$8.38 1/4.

 

Large speculative traders now hold 9,551 net short positions in CBOT soybean futures and options combined contracts as of March 3, compared with net shorts of 1,379 in the previous week, according to the Commodity Futures Trading Commission in its supplemental commitments of traders report.

 

Index funds increased their net long positions in CBOT soybean futures and options. The combined number rose to 96,327 contracts from 96,188 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 60,478 contracts, down from the previous week's 72,232 contracts, as reported in the CFTC supplemental report.

 

March soyoil deliveries totaled 1,938 lots. Customer accounts at Man Professional Clearing issued 1,320 lots and stopped 1,258 lots. The last trade date assigned was March 6.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT.

 

In other news, Brazil's soybean harvest is seen at 57.6 million metric tonnes for the 2008-09 crop year, down 4% on the year, the National Commodities Supply Corp, or Conab, said Monday. The number is slightly above Conab's previous estimate Feb. 5 that put the soy crop at 57.2 million tonnes for 2008-09 compared to 60 million tonnes from the 2007-08 soy crop.

 

The agricultural survey group of Brazil's Census Bureau, or the IBGE, on Monday put the 2008-09 soy crop at 57.6 million metric tonnes. The IBGE's new data is slightly below the 57.8 million tonnes in its February estimate. The number is down from 59.9 million tonnes in 2007-08, said the IBGE.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday, tracking a rebound in the CBOT counterpart Friday. The benchmark September 2009 soybean contract rose 1.1% to settle at RMB3,470 a metric tonne.

 

Crude palm futures on Malaysia's derivatives exchange were closed Monday for a public holiday.