May 1, 2006

 

CBOT Soy Outlook on Monday: Seen up 2-4 cents; e-CBOT, outside markets

 

 

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

 

Analysts expect soybeans to open 2 to 4 cents per bushel higher.

 

In overnight electronic trade, July soybeans were 4 cents higher at US$6.05, July soymeal was US$2.30 higher at US$176.00 and July soyoil was 8 points higher at 25.81 cents per pound.

 

Follow through technical buying should lead prices higher to start the day, with strength from outside markets allowing futures to divorce themselves from bearish fundamental outlooks again, said Don Roose, president U.S. Commodities in West Des Moines Iowa.

 

Bullish biodiesel enthusiasm is seen aiding price strength in soyoil with the support expected to boost soybeans amid higher crude oil prices, Roose added.

 

Technical analysts say July beans have been in a fledgling three-week-old uptrend from the April low of US$5.68 1/4, and Friday's price action is one strong technical clue that the lows are in place in the soybean market. The next major upside price objective for soybeans is the February high of US$6.28, basis July futures.

 

U.S. Midwest cash soybean basis bids are unchanged to lower Monday, cash dealers said. Spot cash soybean bids were down 4 1/2 cents in Peoria Ill., down 4 cents in Sioux City, IA, and down 3 cents in Evansville, Ind, according to cash sources Monday.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said the eastern Midwest will experience light to moderate showers during Monday. A chance for additional showers in a narrow band extending from southeast Missouri and the lower Ohio river valley southward into the northern Delta during Tuesday and Wednesday.

 

In the western Midwest, a chance for light to locally moderate showers is on tap for Monday and Tuesday. These may be heaviest over North Dakota and northern Minnesota where 0.25-1.00 inch should occur. The balance of this region should see only 0.10-0.50 inch during this time. Most of the region should be dry during Wednesday, Meteorlogix added.

 

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 37,123 lots in soybeans as of April 25, down from the previous week's 42,613 net shorts. In soyoil large specs held net long positions of 38,528 compared to 5,802 lots in the previous week. Large specs held net short positions of 18,582 in soymeal, down from net shorts of 19,283 lots reported in the previous week.

 

In deliveries, a total of 1,114 delivery notices were posted against the CBOT May soybean contract. The house account at J.P. Morgan issued 541 lots while a customer account at Kottke was the principal stopper of 492 lots. The last trade date assigned was April 27. A total of 3,013 delivery notices were posted against May soyoil, with the house account at Bunge Chicago the primary issuer of 2,448 of the notices and the house account at ADM Investor Services the principal stopper of 1,937 lots. The last trade date assigned was April 27.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report 10:00 CDT and its weekly crop progress report 1500 CDT. Traders anticipate soybean plantings in the 3% to 6% complete range Monday.