June 8, 2009

 

CBOT Soy Outlook on Monday: Down 5c-10 cents on outside market influences

 

 

Soybean futures on the Chicago Board of Trade are expected to start Monday's day session lower, pressured by the bearish influence of outside financial markets.

 

CBOT soybean futures are seen opening 5 cents to 10 cents lower, with soy product futures following overnight price action.

 

The market is set to start on the defensive on broad based commodity selling, with a firmer U.S. dollar, lower crude oil, equities, gold and silver futures setting the tone, analysts said.

 

"The market has nothing fresh to rally prices, and that will open the door for outside markets to influence early direction," said Vic Lespinasse, analyst with Grainsanalyst.com.

 

Trade consolidation heading toward Wednesday's supply-and-demand reports is expected as well.

 

Planting delays remain a feature, but that is seen as an underpinning factor, not a feature that will spur a rally, Lespinasse said.

 

A technical analyst said first resistance for July soybeans is seen at Friday's high of US$12.36 1/2 and then at US$12.50. First support is seen at Friday's low of US$12.11 1/2 and then at US$12.00.

 

DTN Meteorlogix Weather said rains through the western areas of the Midwest favor early developing corn and soybeans, especially through previously dry areas of the north. Rains in the east and south continue to slow soybean planting, except there has been some warmer and drier weather recently that may have allowed for continued planting progress up until today.

 

Large speculative traders now hold 88,884 net long positions in CBOT soybean futures and options combined contracts as of June 2, compared with net longs of 89,724 in the previous week, according to the Commodity Futures Trading Commission in its supplemental commitment of traders report.

 

Index funds increased their net long positions in CBOT soybean futures and options. The combined number climbed to 130,904 contracts from 129,455 the prior week, according to the CFTC in its supplemental commitments of traders report released Friday. Commercials held net short combined futures and options positions totaling 199,275 contracts, up from the previous week's 196,182 contracts, as reported in the CFTC supplemental report.

 

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 p.m. EDT.

 

In other news, China's soybean imports in June are likely to reach a record high level of 4.617 million metric tonnes, according to a report by the Ministry of Commerce issued Monday. It also cut its forecast for soybean imports in May to 3.96 million tonnes from earlier estimate of 4.29 million tonnes, according to the report published on the ministry's Web site.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Monday, with the market speculating the government may release soybeans from its reserves soon. The benchmark January 2010 soybean contract settled RMB45 lower at RMB3,734 a metric tonne, or down 1.2%.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday, tracking weaker soyoil and crude oil futures in after-hours trade, said trade participants. The benchmark August contract on the Bursa Malaysia Derivatives ended down MYR60 at MYR2,460 a metric tonne.