April 16, 2007

 

CBOT Soy Outlook on Monday: Down 3-5 cents on e-CBOT lead, weather forecasts

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session lower, following the lead of overnight trade. Technical weakness and improved planting outlooks are weighing on prices.

 

In e- trade, May was 5 1/4 cents lower at US$7.32 3/4, July was 5 cents lower at US$7.50, and November soybeans were 4 3/4 cents lower at US$7.79.

 

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

 

The market is poised continue the overnight's trend amid warmer, drier Midwest weather outlooks for the week and technical weakness, analysts said.

 

However, futures are seen gathering underlying support from a higher-than-expected March crush figure, and continued price strength in world vegoil markets, analysts added.

 

A technical analyst said Friday's close basis the July contract closed at a fresh 2.5-month low inflicted some near-term chart damage last week. The next downside price objective is closing prices below solid support at last week's low of US$7.49. Soybean bulls would regain technical momentum by producing a close above solid chart resistance at US$7.70.

 

First resistance for July soybeans is seen at Friday's high of 7.63 and then at US$7.67. First support is seen at last week's low of US$7.49 and then at US$7.45.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest Monday, with a chance for a few very light showers overnight or Tuesday. Dry conditions return Wednesday. Temperatures will average above normal Monday, near to above normal Tuesday, and near normal Wednesday. Mainly dry weather is seen for Thursday, with a chance for showers to develop Friday, with temperatures near normal.

 

In the eastern Midwest, mainly dry conditions are forecast for Monday, with a chance for a few light showers with locally heavier amounts seen for Tuesday into Wednesday. Temperatures will average below normal east and near to above normal west Monday, near normal Tuesday, and below normal Wednesday. Mainly dry conditions are on tap for Thursday, with dry or with only a few light showers in the northwest Friday. Temperatures will average below normal.

 

The Meteorlogix Midwest 6-10 day outlook calls for temperatures to average near to below normal west, near to above normal east, with precipitation near to above normal.

 

The National Oilseed Processors Association said Monday its March soybean crush rates were 147.991 million bushels, above the trade expectation of 144.2 million bushels. It was also significantly over the February figure of 130.779 million bushels. Analysts expected a large crush due to more days in March, according to a survey of industry analysts.

 

NOPA said soyoil stocks in March were 2.933 billion pounds, above trade expectations of 2.748 million pounds and up from 2.820 million pounds in February.

 

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 136,017 combined soybean futures and options contracts as of April 10, down from 136,814 the prior week. Traditional large speculative traders were net long 58,372 contracts compared with net longs of 74,325 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 170,518 contracts, down from the previous week's 193,531 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).

 

In other news, China's soy oil imports in March were at 220,000 tonnes, the General Administration of Customs said Monday. Soy oil imports in the first three month totaled 580,000 tonnes, or up 4.3% from a year earlier, it said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday amid continued oversupply in the physical market, but the downward correction is likely to be brief, said traders. The benchmark September 2007 contract settled RMB11 lower at RMB3,123 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply higher Monday as the market continued its rally to fresh 8 1/2-year highs amid persistent bullish sentiment. The benchmark July CPO contract ended up MYR50 at MYR2,250 a metric tonne.