April 17, 2006

 

CBOT Soy Outlook on Monday: Seen up on e-CBOT, outside markets

 

 

Soybean futures on the Chicago Board of Trade are expected to start Monday's session on firm footing, taking its cue from overnight action, with support from higher inflationary markets lending strength.

 

Analysts expect soybeans to open 3 to 5 cents per bushel higher.

 

In overnight electronic trade, May soybeans were 4 1/2 cents higher at US$5.62 1/4, July soybeans were 5 1/2 cents higher at US$5.83, May soymeal was US$1.10 higher at US$174.50 and May soyoil was 27 points higher at 22.83 cents per pound.

 

The market is poised to rebound coming out of an extended holiday weekend, with sharply higher metals prices and firm energy prices overnight expected to attract speculative and technical buyers, said a CBOT commission house broker.

 

Supportive monthly crushing data and underlying strength from a market weighted with speculative shorts are seen attracting short covering interest, but traders say any sign of buying exhaustion may rekindle downside momentum amid the market's bearish underlying fundamentals.

 

Soaking rains that moved through the Midwest during the weekend are seen possibly slowing corn planting operations which could lend some pressure to soybean prices, traders add.

 

Technical analysts say it will take a close above chart resistance at US$5.85 to provide some fresh upside technical momentum, while a close below the November low of US$5.65 would provide more solid downside technical momentum to suggest another leg down in prices.

 

First resistance for July soybeans is seen at US$5.79 1/2 - last week's high - and then at US$5.81 1/2. First support is seen at US$5.72 3/4 and then at US$5.68 1/4 - last week's low - and then at US$5.65 - the November low.

 

The National Oilseed Processors Association said its members crushed 142.852 million bushels of soybeans in March. The average of analyst's estimates pegged the crush at 140.6 million bushels from a range of estimates that span between 139.4 million and 142.0 million bushels. Soyoil stocks were reported at 2.393 billion pounds compared to the average guess of 2.403 billion from a range of estimates between 2.240 billion to 2.482 billion.

 

U.S. Midwest cash soybean basis bids are unchanged to higher Monday, cash dealers said. Spot cash soybean bids were up 2 cents in Evansville, Ind., and up 3 cents in Peoria, Ill., according to cash sources Monday.

 

The DTN Meteorlogix Weather Service forecast said there were thunderstorms during the weekend period in Brazil but it should be drier during this week. Harvest delays are possible in some locations due to recent rainfall. In Argentina, thunderstorms during the weekend may cause a few harvest delays early this week. Colder weather during the weekend may have caused some frost but significant damage to soybeans is unlikely, Meteorlogix said.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net short futures and options positions totaling 55,941 lots in soybeans as April 11, up from 51,850 lots last week. In soyoil, large speculative traders held net longs of 12,259 lots compared to 9,201 last week, and a net short position of 27,090 lots in soymeal compared to 20,416 a week ago.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CDT (1500 GMT).

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled higher Monday on speculative buying, with strong gains in other commodities futures lending some support, analysts said. The benchmark September 2006 soybean contract settled RMB17 higher at RMB2,604 a metric tonne, after trading between RMB2,585 and RMB2,615/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Monday despite weaker than expected export figures. The benchmark July CPO contract ended at MYR1,470 a metric tonne, up MYR8 from Friday.