June 1, 2009

 

CBOT Soy Outlook on Monday: Up 10-15 cents; outside support, sluggish crop

 

 

Chicago Board of Trade soybean futures are expected to open higher Monday on outside market support and sluggish planting progress, traders said.

 

Soybeans are called 10 to 15 cents higher. In overnight trading, July soybeans were up 17 1/4 cents to US$12.01 1/4 per bushel and November soybeans were up 14 3/4 cents to US$10.77 1/4.

 

July soyoil was up 65 points to 39.70 cents per pound and July soymeal was up US$3.80 to US$386.30 per short tonne.

 

While the market has fundamental support, the tone Monday will be set by a weaker dollar and strong equities.

 

"This remains more about a macro picture than anything else," a trader said.

 

The market moved above US$12 in the July contract overnight and hit a new high of US$12.04 3/4.

 

"Tight old crop supplies and new crop planting delays continue to provide support fundamentally," Farm Futures senior editor Bryce Knorr said in a market commentary.

 

But Knorr noted that "some end users may also be getting cold feet." Analysts also noted that China was reported washing out two to three cargoes of U.S. soybeans.

 

Analysts say that producers have made significant planting progress throughout the western U.S. Midwest, but that planting has been slow in the east, as farmers are still busy trying to finish up corn planting following a very wet spring.

 

The DTN Meteorlogix forecast calls for scattered showers and thunderstorms in the northern half of the Midwest on Monday and Tuesday. Central and southeastern areas will see periods of rain Wednesday, and scattered showers and thunderstorms will develop from west to central areas on Friday.

 

Trade expectations for soybean planting progress in Monday's crop progress report range from 65% to 75%. The U.S. Department of Agriculture will release the report Monday afternoon at 4 p.m. EDT.

 

Speculative funds added 6,125 contracts to their CBOT soybean long positions and added 765 contracts to their short positions, putting them net long 89,724 contracts, the Commodity Futures Trading Commission said Friday.

 

The supplemental commitment of traders report also showed that commercial funds added 2,143 contracts to their long positions and added 10,856 to their short positions, putting them net short 196,183 contracts. Index funds added 5,286 contracts to their long positions and added 2,516 contracts to their short positions, putting them net long 129,455 contracts, the CFTC said.

 

The next upside price objective for the bean bulls is to push and close July prices above solid technical resistance at US$12.50 a bushel, a technical analyst said. The next downside price objective for the bears is pushing and closing prices below solid support at US$11.00 a bushel.

 

In international markets, soybean futures rose on the Dalian Commodity Exchange Monday, leading the agricultural complex higher as prices sought to catch up with external markets after China's holiday break Thursday and Friday last week.

 

The benchmark January 2010 soybean contract rose 2% to settle at RMB3,745 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday on spillover pressure from crude oil and soyoil futures while stronger exports helped to boost prices further, said trade participants.

 

The benchmark August contract on the Bursa Malaysia Derivatives ended MYR65 up at MYR2,625 a metric tonne.