April 28, 2008

 

CBOT Soy Outlook on Monday: Up 10-15 cents; outside markets, demand

 

 

Soybean futures at the Chicago Board of Trade are seen starting Monday session day session firm, taking its cue from overnight trade, with support seen from underlying demand outlooks and firm outside markets.

 

CBOT soybean futures are called to start the session 10 to 15 cents higher.

 

In overnight electronic trading, July soybeans were 14 3/4 cents lower at US$13.40 1/2, November soybeans were 11 cents higher at US$12.33. July soyoil was 75 points higher at 60.40 cents per pound and July soymeal was US$4.00 higher US$349.00 per short tonne.

 

The potential for a resumption of a farmer's strike in Argentina continues to provide a boost for prices, as traders remain optimistic that the strike would generate increased demand for already tight projected U.S. ending stocks, analysts said.

 

Spillover support from corn futures should lend mild support, but concerns about corn planting delays should limit advances in new crop contracts, analysts added. Higher outside inflationary markets and Asian futures are seen aiding the higher tone as well, traders said.

 

Otherwise, technical activity will dominate price action as the market continues to jockey within 3-week old sideways trading range, a CBOT floor broker said.

 

A technical analyst said the next downside price objective for July soybeans is pushing and closing prices below solid technical support at last week's low of US$13.07. The next upside price objective is to push and close prices above psychological resistance at US$14.00 a bushel.

 

First resistance for July soybeans is seen at US$13.50 and then at Friday's high of US$13.72. First support is seen at Friday's low of 13.35 and then at US$13.22.

 

Index funds raised their net long CBOT soybean futures and options positions combined, which now totals 173,208 contracts as of April 22, up from 172,492 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 85,296 contracts compared with net longs of 80,258 in the previous week. Commercials held net short combined futures and options positions totaling 221,722 contracts, up from the previous week's 216,869 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, crude palm oil futures on Malaysia's derivatives exchange ended 2.7% higher Monday on short-covering and fresh buying, taking cues from a rise in crude oil and soyoil prices and a recovery of the U.S. dollar against the Malaysian ringgit, said trade participants. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR91 higher at MYR3,510 a metric tonne, off an intraday low of MYR3,398.

 

China's soybean futures traded on the Dalian Commodity Exchange settled slightly higher Monday on high shipping costs and support from corn. The benchmark January 2009 soybean contract settled RMB3 higher at RMB4,121 a metric tonne, after trading between RMB4,098-4,137/tonne.