March 30, 2009

 

CBOT Soy Outlook on Monday: Lower; economic woes, lacks fresh support

 

 

Chicago Board of Trade soybean futures are poised for a lower start to Monday's day session, with economic woes and an absence of fresh supportive news weighing on the market.

 

CBOT soybean futures are called 10 cents to 15 cents lower.

 

In overnight electronic trading, May soybeans were 10 cents lower at US$8.50 3/4. May soymeal was US$4.20 lower at US$279.60 per short tonne, while May soyoil ended 35 points lower at 32.07 cents per pound.

 

The combination of lower stock indexes, weakness in crude oil and metals and a firmer U.S. dollar is setting stage for futures to follow the lower overnight theme, analysts said.

 

Traders are eyeing broader markets for direction, taking a cautious approach in the face of economic jitters and the potential for bearish data in Tuesday's planting and quarterly grain stock reports, a CBOT floor analyst said.

 

A lack of fresh supportive news is failing to provide any incentive to pull buyers off the sidelines, with the suspension of Argentina's farmers strike Friday taking some support away from the market.

 

Technical weakness is seen aiding the defensive tone, with prices falling below major moving average support last week while stumbling near two-week lows.

 

A market technician said first resistance for May soybeans is seen at US$9.25 and then at US$9.40 on technical charts. First support is seen at Friday's low of US$9.16 and then at US$9.00.

 

Soy product futures are seen lower, in step with overnight action.

 

Large speculative traders now hold 17,176 net long positions in CBOT soybean futures and options combined contracts as of March 24, compared with net shorts of 970 in the previous week, according to the Commodity Futures Trading Commission in its supplemental commitments of traders report.

 

Index funds increased their net long positions in CBOT soybean futures and options. The combined number rose to 110,026 contracts from 102,617 the prior week, according to CFTC in its supplemental commitments of traders report released Friday. Commercials held net short combined futures and options positions totaling 101,955 contracts, up from the previous week's 78,988 contracts, as reported in the CFTC supplemental report. On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT.

 

USDA is scheduled to release its prospective planting and quarterly grain stock reports Tuesday at 8:30 a.m. EDT. The reports are expected to show an increase in soybean seedings from 2008, with soybean stocks as of March 1 projected to reveal solid second-quarter usage.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Monday on declines in local cash prices and in CBOT futures Friday. Crude palm oil futures on Malaysia's derivatives exchange declined Monday on pressure from lower soybean oil and crude oil futures and expectations of lower on-month exports in March, said trade participants.