May 21, 2007

 

CBOT Soy Outlook on Monday: Up 2-4 cents, e-CBOT, technicals, corn strength

 

 

Chicago Board of Trade soybean futures are seen beginning Monday's day session on firm footing, taking their cue from overnight trade, with supportive technicals and spillover from corn offering support.

 

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

 

In overnight e-CBOT trading, July soybeans were 3 3/4 cents higher at US$7.96 1/4 per bushel, and November were 3 3/4 cents higher at US$8.25.

 

The market is poised to start higher, rebounding after a couple of days of treading water, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The market's technicals are positive, spillover strength from corn is expected and with concerns over dryness in the eastern Midwest and the southeastern U.S., the market should put back what it took out Friday, Roose added.

 

Traders said as long as corn prices stay firm and the Brazilin Real remains strong soybeans should continue to find underpinning support. The market will also keep an eye on soyoil, with an emerging global biofuel market and strong energy prices propelling soyoil futures to their highest levels since 1984 Friday, traders added.

 

A market technician said market bulls still have upside technical momentum on their side. The next upside price objective for July soybeans is closing prices above major psychological resistance at US$8.00. The next downside price objective is closing prices below solid support at US$7.70.

 

First resistance for July soybeans is seen at Friday's high of US$7.97 and then at US$8.00. First support is seen at US$7.90 and then at US$7.85.

 

In demand news, U.S. Department of Agriculture reported private exporters announced the sale of 110,000 metric tonnes of U.S. soybeans to China for delivery in the 2007-08 marketing year.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions with only a few light showers are expected in the western Midwest Monday. Scattered showers and thunderstorms, 0.30-1.50 inch, are seen for Tuesday into Wednesday, with temperatures averaging above normal Monday and Tuesday, and near to below normal Wednesday.

 

In the eastern Midwest, mainly dry conditions are tap for Monday and Tuesday. Dry conditions with only a few light showers will develop in the western areas. Temperatures will average above normal during this period, Meteorlogix reports.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds were reported to hold net long positions totaling 139,611 combined soybean futures and options contracts as of May 15, up from 137,846 the prior week. Traditional large speculative traders were net long 73,803 contracts compared with net longs of 45,261 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 185,581 contracts, up from the previous week's 151,093 contracts.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT (1500 GMT) and weekly crop progress reports at 4:00 p.m. EDT.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Monday on strong fundamentals, shrugging off the central bank's latest round of tightening measures. The benchmark September 2007 soybean contract settled RMB1 higher at RMB3,223 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower Monday after choppy trading, with data showing improved exports so far in May countered by expectations of strong production growth. The benchmark August contract ended down MYR8 at MYR2,362 a metric tonne.