June 12, 2006

 

CBOT Soy Outlook on Monday: Up 9-11 cents; e-CBOT, weather concerns

 

 

Soybean futures on the Chicago Board of Trade are seen starting the week on firm footing, following overnight trends as the market adds risk premium amid weather concerns for the western Midwest.

 

Soybeans are called to open 9 to 11 cents higher.

 

In overnight electronic trade, July soybeans were 10 3/4 cents higher at US$5.96 1/2, July soymeal was US$2.90 higher at US$179.50 and July soyoil was 40 points higher at 25.26 cents per pound.

 

The market has held together well recently, and with a dose of weather concerns for the western Midwest futures are poised for a weather premium boost in prices, said Don Roose, president U.S. Commodities in West Des Moines, IA.

 

The driest areas of the Midwest, western Iowa, Kansas, Nebraska and Missouri are expected to encounter dry conditions with temperatures in the 90 degree Fahrenheit area in the latter part of the week, forecasters said

 

The weather issues will attract fresh buying, as futures stay in tune with expected strength in the neighboring corn market, with outside inflationary markets not providing much leadership, analysts said.

 

The DTN Meteorlogix Weather Service forecast said hot temperatures in eastern Nebraska and far west Iowa back on Friday are a reflection of the drier top soils in that area, and its not likely that this will change anytime soon. The 6-10 day forecast for the western Midwest calls for temperatures to average above normal, with precipitation near to above normal north, and near to below normal south.

 

In the eastern Midwest, soybean development will benefit from the warmer and drier trend later this week and this coming weekend. The 6-10 day outlook for the region calls for temperatures to average near to above normal, with rainfall near to below normal, Meteorlogix said.

 

Technical analysts say the market looks to start the new week in strong fashion, with the next upside price objective is closing prices above this month's high of US$6.11. A close back below technical support at US$5.80 would provide better downside technical momentum.

 

First resistance for July soybeans is seen at US$5.92 1/2--Friday's high--and then at US$6.00. First support is seen at US$5.83 1/2--Friday's low--and then at US$5.80.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday, cash dealers said. Spot cash soybean bids were up 5 cents in Frankfort Ind, and down 1-cent in St Louis, MO, according to cash sources Monday.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report 10:00 a.m. CDT and its weekly crop progress report at 3:00 p.m. CDT.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net short futures and options positions totaling 13,105 lots in soybeans as of June 6, compared to the previous week's net shorts of 13,887 lots. In soyoil large specs held net long positions of 54,260 compared to 54,728 lots in the previous week. Large specs held net short positions of 4,155 in soymeal, down from net shorts of 27,430 lots reported in the previous week.

 

Rotterdam soybeans were mostly higher and soymeal prices were mixed. European vegoils were mixed.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended higher Monday on borrowed strength from rival soyoil futures. The benchmark contract ended at MYR1,467/tonne, up MYR11 from Friday after moving between MYR1,462 and MYR1,469/tonne.