March 15, 2010

 

CBOT Soy Outlook on Monday: Down 1-2 cents on outside market pressure

 

 

Chicago Board of Trade soybean futures are expected to start Monday's day session with modest declines, under pressure from bearish outside market influences.

 

Overnight, CBOT May soybeans were 1 1/4 cents lower at US$9.24 1/4 a bushel.

 

A firmer U.S. dollar and weaker crude oil futures are seen pressuring prices in the absence of fresh market moving fundamental news.

 

Lingering fears of China tightening its monetary policy and the potential impact that would have on U.S. soybean exports provides some underlying weakness, analysts said.

 

China is the world leader in soybean imports.

 

Worries that China may continue to cancel cargoes of previously bought U.S. supplies in favor of cheaper South American supplies or new crop sales adds a bearish twist to prices as well.

 

However, downside pressure is seen limited, as the recent sharp break in prices reduces the need for new selling pressure, analysts said.

 

Mild support is expected from a higher-than-expected monthly crushing figure from National Oilseed Processor Association. Meanwhile, soyoil futures may garner pressure from larger-than-expected soyoil stocks announced in the report.

 

NOPA says 148.351 million bushels of soybeans were crushed in February. That's down from 162.4 million in January, but higher than the average analyst estimate of 144.5 million. The report reflects a record large U.S. soybean crush rate for February, AgResource says in a research note. Soyoil stocks are pegged at 2.852 billion pounds, up from 2.695 billion in January and above the average analyst estimate of 2.786 billion.

 

A technical analyst said first resistance for May soybeans is seen at Friday's high of US$9.38 and then at US$9.50. First support is seen at Friday's low of US$9.23 and then at US$9.11.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Monday as traders remained cautious amid macroeconomic pressure due to concerns over tightening monetary policy as well as a lack of positive news. The September 2010 soybean contract settled down RMB15, or 0.4%, at RMB3,800 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange fell Monday, extending a downward correction from the highs hit a week earlier amid profit-taking and liquidation of long positions. The May contract on Bursa Malaysia Derivatives ended MYR59, or 2.2%, lower at an intraday low of MYR2,590 a metric tonne.