May 12, 2008

 

CBOT Soy Outlook on Monday: Seen up on follow-through buying

 

 

Soybean futures on the Chicago Board of Trade are seen starting Monday's day session higher, feeding off the overnight theme, with carryover momentum from Friday's strong gains underpinning prices.

 

CBOT soybean futures are called to start the session 8 to 12 cents higher.

 

In overnight electronic trading, July soybeans were 13 1/2 cents higher at US$13.71 1/2, November soybeans were 11 cents higher at US$13.14 3/4. July soyoil was 24 points higher at 62.24 cents per pound and July soymeal was US$7.50 higher US$346.00 per short tonne.

 

Supportive underlying fundamentals with tight projected ending stocks remain a key influence on prices, with optimistic demand outlooks amid the ongoing farmers' strike in Argentina a bullish feature, a CBOT floor analyst said.

 

New crop futures are finding strength from concerns that ongoing planting delays for corn will push back soybean seedings as well, and with soybean seed quality a issue, yields come into question the longer it takes to get the 2008 crop sown, he added.

 

However, outside market influences are expected to take some edge off prices, with a firmer U.S. dollar, and weakness in crude oil, gold and silver futures applying pressure, traders added.

 

A technical analyst said market bulls gained fresh upside technical momentum Friday as prices pushed above key moving averages. The next upside price objective for July soybeans is to push and close prices above solid technical resistance at the April high of US$14.15 a bushel. The next downside price objective is pushing prices below solid technical support at US$13.20, which would fill on the downside Friday's upside price gap.

 

First support for July soybeans is seen at US$13.50 and then at Friday's low of US$13.30. First resistance is seen at Friday's high of US$13.65 and then at US$13.72.

 

Index funds lowered their net long CBOT soybean futures and options positions combined, which now totals 169,119 contracts as of May 6, down from 171,110 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 77,716 contracts compared with net longs of 78,061 in the previous week. Commercials held net short combined futures and options positions totaling 211,441 contracts, down from the previous week's 211,902 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 10 lots. The house account at Rosenthal Collins issued all 10 lots, with a customer account at Banc of America Securities stopping 8 lots. The last trade date assigned was April 24.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled sharply higher Monday on a U.S. Department of Agriculture report with lower-than-expected estimates of ending stocks. The benchmark January 2009 soybean contract settled RMB189 higher at RMB4,411 a metric tonne, or up 4.48%, after trading between RMB4,328 and RMB4,433/tonne.

 

Meanwhile, China imported 2.39 million metric tonnes of soybeans in April, according to preliminary data issued by the General Administration of Customs Monday, down 9.8% from a year earlier. From January to April, China imported 10.17 million tonnes of soybeans, up 21.5% on year, it said.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 2.14% higher Monday but couldn't sustain the 24-day highs hit during the session after estimates showing higher imports and poor export growth in April spurred profit-taking, trade participants said. The benchmark July contract on the Bursa Malaysia Derivatives ended MYR75 higher at MYR3,570 a metric tonne, off an intraday high of MYR3,623.