May 5, 2008

 

CBOT Soy Outlook on Monday: Down 2-4 cents on overnights, market uncertainties

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session lower, following the overnight trend amid a lack of fresh fundamental news to direct prices.

 

CBOT soybean futures are called to start the session 2 to 4 cents lower.

 

In overnight electronic trading, July soybeans were 9 1/2 cents lower at US$12.95, November soybeans were 1 1/2 cents lower at US$12.17. July soyoil was 45 points higher at 57.71 cents per pound and July soymeal was US$4.40 lower US$333.60 per short tonne.

 

The uncertainties in the market tied to the Argentina farmer's strike, concerns about slow planting progress in corn and its impact on soybean acreage as well as positioning ahead of Friday's supply and demand report is promoting a subdued tone in the market, said Don Roose of U.S. Commodities.

 

The market will remain cautious, keeping an eye on Midwest weather forecasts and developments in Argentina in early action, Roose said.

 

Meanwhile, supportive outside influences, with a weaker U.S. dollar and firmer crude oil and precious metal futures are seen as friendly to commodity markets in general, traders added.

 

A technical analyst said prices are in a two-week-old downtrend on the daily bar chart. The next downside price objective for July soybeans is pushing and closing prices below solid technical support at last week's low of US$12.44. The next upside price objective is to push and close prices above solid technical resistance at US$13.50 a bushel.

 

First resistance for July soybeans is seen at Friday's high of US$13.11 and then at US$13.25. First support is seen at US$12.80 and then at Friday's low of US$12.65.

 

Index funds lowered their net long CBOT soybean futures and options positions combined, which now totals 171,110 contracts as of April 29, down from 173,208 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 78,061 contracts compared with net longs of 85,296 in the previous week. Commercials held net short combined futures and options positions totaling 211,902 contracts, down from the previous week's 221,722 contracts.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT and its weekly crop progress report at 4:00 p.m. EDT.

 

In deliveries, May soybean deliveries totaled 64 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was April 22.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled mostly higher Monday, tracking gains made at CBOT on Friday. The benchmark January 2009 soybean contract settled RMB45, or 1.1%, higher at RMB4,099 a metric tonne after trading between RMB4,047-4,122/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange opened 1.5% higher Monday in sluggish trade, with investors taking cues from strong Indian demand for palm olein and resumption of protests by soybean growers in Argentina, said trade participants. The benchmark July contract on Bursa Malaysia Derivatives ended MYR49 higher at MYR3,390/tonne, trading in positive territory throughout the day.