April 21, 2008

 

CBOT Soy Outlook on Monday: Down 15-20 cents; technical sales, lacks fresh support

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session on the defensive, backpedaling in unison with overnight trade, pressured by technical selling and a lack of fresh support news.

 

CBOT soybean futures are called to start the session 15 to 20 cents lower.

 

In overnight electronic trading, July soybeans were 18 cents lower at US$13.59, November soybeans were 17 1/2 cents lower at US$12.63 1/2. July soyoil was 91 points lower at 61.83 cents per pound and July soymeal was US$3.40 lower US$348.30 per short tonne.

 

The absence of fresh supportive news coupled with overbought market conditions serves as the catalyst for the lower tone, said Jason Roose, analyst with U.S. Commodities in West Des Moines, Iowa.

 

Speculators continue to hold large net long positions in the market, but without fresh supportive fundamental influences, traders are trimming some length amid the uncertainties of acreage and weather, analysts added.

 

The inability of futures breach overhead resistance in recent sessions is attracting light selling pressure as well, but the daily dose of bullish outside market influences continues to provide underlying strength, traders added.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at last week's high of US$14.15 a bushel. The next downside price objective is pushing and closing prices below solid technical support at Friday's low of US$13.32.

 

First resistance for July soybeans is seen at Friday's high of US$13.80 and then at US$14.00. First support is seen at US$13.60 and then at US$13.50.

 

Index funds raised their net long CBOT soybean futures and options positions combined, which now totals 172,492 contracts as of April 15, up from 165,003 the prior week, according to Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Traditional large speculative traders were net long 80,258 contracts compared with net longs of 71,920 in the previous week. Commercials held net short combined futures and options positions totaling 216,869 contracts, up from the previous week's 202,832 contracts.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Monday on expectations CBOT soybean contracts will decline and spillover weakness of other domestic agricultural futures, analysts said. The benchmark January 2009 soybean contract settled RMB91 lower at RMB4,118 a metric tonne, after trading between RMB4,071/tonne and RMB4,228/tonne.