April 20, 2009
CBOT Soy Outlook on Monday: Lower start amid bearish outside markets
Soybean complex futures at the Chicago Board of Trade are called to open lower Monday morning, following overnight losses in electronic trading and amid bearish key outside markets.
"Crude oil prices are solidly lower, while the U.S. dollar is stronger and U.S. stock indexes are also lower. This will pressure the soybean futures market early," said veteran market analyst Victor Lespinasse with www.grainanalyst.com.
In overnight trading overseas, China's soybean futures traded on the Dalian Commodity Exchange settled lower as profit-taking kicked in following gains in the last trading session, in line with overnight losses on the Board of Trade. The benchmark January 2010 soybean contract settled 1.5% lower at RMB3,492 a metric tonne. Analysts said Dalian soybean futures will likely consolidate in the near term on technical cues as fresh fundamental news is lacking.
In other news, reports Monday morning said the Rosario Grain Exchange reduced its Argentine soybean crop estimate to 37.3 million metric tonnes from 41.7 MMT.
Weather conditions across the Corn Belt are expected to be cool and wet in the eastern belt and dry in the western belt to start the week, after some weekend rains. A warmer and drier pattern will develop later in the week. Recent wet weather in parts of the Corn Belt will prompt delays in early season field work, said Meteorlogix weather. Lespinasse said any corn planting delays in the Corn Belt are likely to be a bearish factor for soybeans, as intended corn acres could be switched to soybeans if wet weather persists into May.
The latest commitments of traders report issued by the Commodity Futures Trading Commission on Friday afternoon showed large speculators increasing their net long positions in soybeans by 10,577 contracts, to 109,037 contracts. Meantime, commercial soybean traders increased their net short positions by 18,121 contracts, to 207,224 contracts.
From a technical perspective, July soybeans on Friday closed lower and near the session low after hitting a fresh three-month high early on. The low-range close on Friday does start to suggest the bulls are becoming exhausted at higher price levels. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at the January high of US$10.76 a bushel. The next downside price objective for the bears is pushing and closing prices below solid technical and psychological support at US$10.00 a bushel.
