March 16, 2009

Soybean futures on the Chicago Board of Trade are expected to firm 6-8 cents during Monday's opening trades, following overnight gains.

 

In overnight electronic trading, May soybeans rose 8 cents to US$8.84 1/2 per bushel. The July contract added 7 cents to US$8.82 1/4. May soymeal lost US$3 to US$286 per short tonne and May soyoil increased 5 points to 30.22 cents per pound.

 

"Soybeans should open stronger this morning, though overnight gains came on light volume," said Bryce Knorr, Farm Futures senior editor in a Monday morning market commentary. "Fears about rising new crop acreage and weaker crude oil prices punished the market on Friday."

 

"May soybeans traded in a range of more than 20 cents overnight, with falling crude oil prices weighing on the market early," Knorr said.

 

The Organization of Petroleum-Exporting Counties Sunday decision against further production-cutting quotas broke crude oil more than US$2, though the energy complex was able to move off its overnight lows this morning, Knorr added.

 

The National Oilseed Processors Association estimated February soybean crush at 128.668 million bushels, down 10.432 million from last month. Analysts expected soybean crush to drop further to 126.2 million bushels due to sluggish domestic meal demand, according a Dow Jones survey of industry analysts.

 

NOPA soyoil stocks in February increased to 107387 million pounds to 2.501 billion pounds. Analysts expected an increase of 158 million pounds to 2.551 billion pounds from the 2.393 billion reported in January.

 

Soybean bears retain in overall near-term technical command, a market technician said., noting prices remain in a two-month downtrend on the daily bar chart.

 

The bears are aiming to close May soybeans below solid technical support at the March low of US$8.38 1/4 a bushel, the technician said, pegging first support at Friday's low of US$8.67 1/4 and then at last week's low of US$8.56 1/2.

 

Market bulls are looking to close prices back above psychological resistance at US$9 a bushel, a market technician said, marking first resistance at Friday's high of US$8.89 3/4 and then at last week's high of US$8.95.

 

Index funds added to their long and short CBOT combined soybean futures and options positions, wrapping up the week ended March 10 net long 96,130 positions, according to the Commodity Futures Trading Commission in its supplemental commitment of traders report released Friday. Index funds added 394 long positions and 591 short positions.

 

Traditional large speculative traders were net short 6,696 contracts, after dropping 3,336 short positions and shedding 483 long positions. Commercials held net short combined futures and options positions totaling 65,669 contracts after reducing long positions by 2,843 and adding 2,348 short positions.

 

In global trading news, China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday, supported by cash prices.

 

The benchmark September 2009 soybean contract settled RMB31, a metric tonne, or 0.9%, higher at RMB3,492/tonne after trading between RMB3,449-3,520/tonne during the session.

 

China imported 40,000 metric tonnes of soyoil in February, down 89% from a year earlier, according to preliminary data issued Monday by the General Administration of Customs.

 

Soyoil imports in the first two months fell 89% on year to 60,000 tonnes, it said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday, closely tracking outside markets after RBD palm olein was offered at a premium to crude soyoil for the first time in two years, trade participants said.

 

CPO futures ended lower despite strong gains in exports on concern that demand may weaken in the medium term, they said.

 

The benchmark June contract on Bursa Malaysia Derivatives ended MYR28 lower at MYR1,902 a metric tonne after reaching an intraday high of 1,948/tonne.

 

In Argentina, early yields from the 2008-09 soy crop have been low so far, but recent showers helped to stem further losses, the Buenos Aires Cereals Exchange said in its weekly crop report Friday.

 

To date, 1.1% of the 17.36 million hectares planted with soy this season have been harvested.

 

Yields have averaged 1.96 metric tonnes per hectare, down 0.7 tonnes from the average at this point last year.