March 26, 2007

 

CBOT Soy Outlook on Monday: Down 3-5 cents; following overnight theme

 

 

Chicago Board of Trade soybean futures are poised for a lower start to Monday's day session, taking is cue from overnight trade amid the absence of fresh fundamental news.

 

In e-CBOT trade, May was 4 1/2 cents lower at US$7.65 and November soybeans were 5 cents lower at US$8.08.

 

CBOT soybean futures are called to start the session 3-5 cents lower.

 

The market is seen following the lower theme established in the overnight session, with carryover weakness from Friday's declines weighing on prices, a CBOT floor analyst said.

 

The absence of fresh fundamental news will keep attention on technical factors, with analysts anticipating another choppy session as traders gear up for Friday's acreage and stocks reports.

 

Meanwhile, bullish speculation surrounding 2007 U.S. soybean acreage and spillover strength from outside crude oil and metals markets are seen limiting downside movement as well, traders added.

 

A technical analyst said market bulls had a good week last week, with the next upside objective is to produce a close above solid chart resistance at US$7.77 1/2, basis May futures. This would fill a downside price gap on the daily bar chart. The next downside price objective is closing prices below solid support at US$7.50.

 

First resistance for May soybeans is seen at Friday's high of US$7.75 and then at US$7.77 1/2. First support is seen at US$7.63 1/4 and then at US$7.60.

 

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 135,059 combined soybean futures and options contracts as of March 20, down from 135,695 the prior week. Traditional large speculative traders were net long 67,926 contracts compared with net longs of 64,114 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 186,558 contracts, up from the previous week's 183,567 contracts.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11:00 a.m. EDT (1500 GMT). USDA is scheduled to release its prospective plantings and quarterly grain stocks reports Friday 8:30 a.m. EDT (1230 GMT).

 

The DTN Meteorlogix Weather Service forecast said moderate to heavy showers and thunderstorms are on tap for western Midwest, causing some transportation delays. In the eastern Midwest, frequent episodes of rain, showers, and thunderstorms during the next seven days will disrupt and delay fieldwork.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday as the market waits for the March 30 planting report from the U.S. Department of Agriculture. The benchmark September 2007 contract settled RMB12 lower at RMB3,213 a metric tonne.

 

Crude palm oil futures Monday finished down on the Bursa Malaysia Derivatives, after a bearish export data release showed underlying weakness in a market that had shot up rapidly in early trading. The benchmark June contract for CPO finished at MYR1,995 a metric tonne, down MYR15, after touching an intraday high of MYR2,030/tonne.

 

In other news, China established the China Soybean Industry Association over the weekend, following four years of preparations. The association will follow the aims and practices of the American Soybean Association.