May 29, 2007

  

CBOT Soy Outlook on Tuesday: Down 2-4 cents; following e-CBOT, weekend rains

 

 

Chicago Board of Trade soybean futures are expected to start Tuesday's session on the defensive, influenced by overnight declines amid weekend showers across the Midwest.

 

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

 

In overnight e-CBOT trading, July soybeans were 4 1/4 cents lower at US$8.08 1/4 per bushel, and November were 4 cents lower at US$8.37 1/2.

 

The market should come under pressure from better-than-expected weekend moisture across the corn-belt, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The weekend rains and forecasts for additional showers this week is the primary driver of the lower calls, but the continued lack of moisture in the southeast U.S. and new highs in Palm Oil futures overnight will limit losses, Roose added.

 

Otherwise, traders will keep an eye on technical factors and midday weather outlooks for future direction, while also looking ahead to Tuesday afternoon's crop progress report, analysts said. The trade is anticipating U.S. soybean planting progress in a range of 78% to 90% complete.

 

A technical analyst said market bulls have solid upside technical momentum heading into the new trading week. The next upside price objective for July soybeans is closing prices above solid technical resistance at the contract high of US$8.22. The next downside price objective is closing prices below solid support at US$7.90.

 

First resistance for July soybeans is seen at Friday's high of US$8.13 and then at US$8.22. First support is seen at Friday's low of US$8.07 and then at US$8.00.

 

The DTN Meteorlogix Weather Service forecast said rain and thunderstorms will maintain favorable moisture conditions for emerging and developing crops in the western Midwest. Drier weather later this weekend and early next week may turn out to be short lived.

 

In the eastern Midwest, weekend showers will help replenish soil moisture after the recent drier trend but more is still needed. The outlook does see a chance for some rain later this week but amounts and coverage are somewhat uncertain, 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 141,189 combined soybean futures and options contracts as of May 22, up from 139,611 the prior week.

 

Traditional large speculative traders were net long 98,371 contracts compared with net longs of 73,803 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 211,478 contracts, up from the previous week's 185,581 contracts.

 

On tap for Tuesday, 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, crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Tuesday as late profit-taking eroded gains after the market had reached a record high earlier. The contract rose to as high as MYR2,590/tonne, the highest level for a benchmark contract since the revamped CPO futures market was launched in 1985. The benchmark August contract ended at MYR2,538 a metric tonne, up MYR3 from Monday.

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday, lacking guidance as CBOT was closed Monday. The new benchmark January 2008 soybean contract settled RMB36 lower at RMB3,344 a metric tonne.