March 12, 2007

 

CBOT Soy Outlook on Monday: Flat to down 2 cents; e-CBOT, lacks fresh news

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session with a steady to lower undertone, in tune with the overnight theme amid the absence of fresh fundamental news.

 

Soybean futures are called to open steady to 2 cents lower.

 

In e-CBOT trade, March was 1-cent higher at US$7.47 1/2 per bushel, May was 1-cent lower at US$7.58 3/4 and November soybeans were 1-cent lower at US$7.98 1/2.

 

The void of news is expected to keep prices chopping around, as the trade awaits the planting intentions report at the end of the month, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The eyes of the market are focused on what could be the biggest report of the year, with traders prepared to focus on private acreage estimates, as Informa Economics is expected to release their projections Tuesday, Roose added.

 

Meanwhile, weakness in crude oil futures, aggressive harvesting in parts of Brazil and the loss of upside technical momentum is seen keeping defensive pressure on prices, traders said.

 

A technical analyst said recent technical damage has not been serious, but market bulls have wilted a bit and have more work to do. A potentially bearish flag formation has developed on the daily bar chart, and the market would regain some fresh upside technical momentum by filling on the upside this month's downside price gaps on the daily bar chart. That means pushing prices back to US$7.93 1/2 basis the May future. The next downside price objective for is closing prices below solid support at last week's low of US$7.39 1/2.

 

First resistance for May soybeans is seen at last week's high of 7.65 1/2 and then at US$7.70. First support is seen at US$7.55 and then at US$7.50.

 

The DTN Meteorlogix Weather Service forecast said a weak disturbance could cause some light rain or rain changing to snow Wednesday in the western U.S. Midwest. In the eastern belt, scattered rains and warm temperatures are expected.

 

Meanwhile, Meteorlogix said there are no significant concerns for the mature crops and harvesting in northern Brazil. Weekend rainfall in Parana may lead to minor harvest delays early this week, while weekend rain through Brazil's southern growing areas will favor filling crops.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds were reported to hold net long positions totaling 134,460 combined soybean futures and options contracts as of March 6, down from 135,639 the prior week. Traditional large speculative traders were net long 53,382 contracts compared with net longs of 83,851 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 171,936 contracts, down from the previous week's 200,244 contracts.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CDT (1500 GMT).

 

In deliveries, two hundred and twelve delivery notices were posted against the March soybean futures. The last trade date assigned was March 9. Issuers and stoppers were scattered among firms with the house account at Term Commodities a stopper of 45 notices.

 

In other news, China's soybean imports in February totaled 1.18 million metric tonnes, preliminary data provided Monday by the General Administration of Customs showed. In the January-February period, soybean imports rose 29% on year to 3.61 million tonnes.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Monday, with gains in Chicago Board of Trade soybean futures offsetting the impact of weak domestic soymeal and soyoil prices. The benchmark September 2007 contract settled RMB3 lower at RMB3,205 a metric tonne, with total trading volume at 89,408 lots. One lot equals 10 tonnes.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher Monday after a subdued, choppy trading day as most participants waited for the official start of an important industry conference. The benchmark May contract ended at MYR1,972 metric tonne, up MYR9 from Friday.