March 29, 2010

 

CBOT Soy Outlook on Monday: Dollar weakness seen buoying prices

 

 

Soybean futures at the Chicago Board of Trade are expected to start the trading week higher, buoyed by supportive outside market influences.

 

CBOT soybeans are seen opening 6 cent to 8 cents higher.

 

Overnight, CBOT May soybeans were 7 cents higher at US$9.59 a bushel.

 

Bullish outside markets with a weaker U.S. dollar is pointing to firm prices, with broad-based strength in commodity markets lending support as well.

 

A lack of fresh fundamental news is keeping attention on outside influences, with reduced concerns over Greece's financial ability to borrow in world credit markets weighing on the U.S. dollar in early trading, AgResource said in a market note.

 

A weaker dollar is often seen as supportive, attracting speculative buying because of perceptions that it makes U.S. grain and oilseeds more attractive to foreign buyers and increases investors' appetite for risk.

 

Meanwhile, the market is heading toward Wednesday's planting and stocks reports holding short positions and that should generate some short covering, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

The market is concerned about the potential for a bullish quarterly stocks report amid strong usage for exports and crush in the first half of the marketing year, he added.

 

U.S. Department of Agriculture will release its planting intentions and quarterly stocks reports Wednesday at 8:30 a.m. EDT.

 

Lingering talk of an expanding port strike in Argentina is seen lending light support. However, the weight of a record South American harvest should limit upside potential.

 

A market technician said the next downside price objective for May soybeans is pushing and closing prices below solid technical support at the March low of US$9.21 3/4. The next upside technical objective is pushing and closing May prices above solid technical resistance at last week's high of US$9.76 1/2.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday, following gains Friday on CBOT. The September 2010 soybean contract settled up RMB22, or 0.6%, at RMB3,867 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower in choppy trading Monday amid profit-taking and fresh buying. The June contract on the Bursa Malaysia Derivatives exchange ended MYR14 lower at MYR2,520/tonne.