April 9, 2007
CBOT Soy Outlook on Monday: Up 8-10 cents on e-CBOT, corn, wheat spillover
Chicago Board of Trade soybean futures are seen starting Monday's day session higher, following the overnight trend with spillover support from corn and wheat futures underpinning influences.
In e-CBOT trade, May was 9 1/4 cents higher at US$7.69 3/4 and November soybeans were 9 1/4 cents higher at US$8.14.
CBOT soybean futures are called to start the session 8 to 10 cents per bushel higher.
The soybean market is seen taking on the role of a follower, dragged up by expected sharply higher openings in neighboring corn and wheat futures, analysts said.
However, upside potential is seen limited, anchored by the potential for weather-delayed plantings of corn and crop damage to winter wheat crops that could result in additional soybean acreage, analysts added.
Otherwise, technical influences will play a key role, with trade positioning ahead of Tuesday's supply and demand report a feature as well, traders added.
A technical analyst said market bulls would regain upside technical momentum by producing a close above solid chart resistance at last week's high of US$7.87 basis May futures. The next downside price objective is closing prices below solid support at US$7.50.
First resistance for May soybeans is seen at Thursday's high of 7.65 12/2 and then at US$7.70. First support is seen at Thursday's low of US$7.58 and then at US$7.55.
The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest on Monday, with a chance for light or locally moderate precipitation Tuesday. Drier weather returns Wednesday, with temperatures averaging below normal during this period. Rain develops Thursday or during Thursday night, with rain and thunderstorms or even snow before ending during Friday night or early Saturday.
In the eastern Midwest, conditions will be mainly dry Monday and early Tuesday, with a chance for showers, later Tuesday or Wednesday. Temperatures will average below normal during this period. There is a chance for a little light rain or drizzle later Thursday, and a chance for thunderstorms or rain during Friday and Saturday. The rain may mix with or change to snow before ending Saturday night, Meteorlogix forecasts.
The Meteorlogix 6-10-day forecast calls for temperatures across the Midwest to average near to below normal, with precipitation near to above normal south and east, and near to below normal northwest.
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 136,814 combined soybean futures and options contracts as of April 3, up from 133,129 the prior week. Traditional large speculative traders were net long 74,325 contracts compared with net longs of 70,163 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 193,531 contracts, up from the previous week's 185,507 contracts.
On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT (1500 GMT).
USDA is scheduled to release its April supply and demand report Tuesday. The average analysts estimates from a Dow Jones surveys pegs the 2006-07 soybean ending stocks at 586 million bushels, down from the March estimate of 595 million. The estimates ranged from 562 million to 615 million bushels.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday, thanks to gains in soybean futures during electronic trading on the CBOT. The benchmark September 2007 contract gained RMB18 to settle at RMB3,249 a metric tonne, after trading between RMB3,240 and RMB3,263/tonne.
Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Monday, with the benchmark contract reaching a new eight-year high, tracking strong gain in other commodities. The benchmark June contract ended at MYR2,132 a metric tonne, up MYR23 from Friday.
