June 15, 2009

 

CBOT Soy Outlook on Monday: Down 20-25 cents, dollar strength, warmer forecasts

 

 

Bearish outside market influences coupled with more favorable weather outlooks for central U.S. crops are expected to weigh on Chicago Board of Trade soybean futures in early action Monday, analysts said.

 

CBOT soybean futures are seen opening 20 cents to 25 cents lower.

 

The market is poised to follow through on overnight price weakness, with a stronger U.S. dollar and weakness in crude oil and equities sending bearish price signals, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

The market is primed to take some premium out of prices, with new crop futures garnering pressure from warmer central U.S. weather forecasts that will aid crop development and promote late planting opportunities, traders said.

 

A tight old crop scenario and higher-than-expected May crush data should limit losses in the nearby July contract, but upward movement in the U.S. dollar will remain a key influence on direction, Lespinasse said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above major psychological resistance at US$13.00 a bushel. The next downside price objective is pushing and closing prices below solid support at US$12.00 a bushel.

 

DTN Meteorlogix said episodes of scattered showers will favor developing crops in the western and northern Midwest. Meanwhile, episodes of scattered rains through the southeast areas will continue to slow late spring field work.

 

National Oilseed Processors Association says 142.2 million bushels of soybeans were crushed in May, up from 134.1 million in April, and above the average analyst estimate of 137.2 million. The range of pre-report estimates was 134.5 million to 139.5 million. Soyoil stocks were pegged at 2.684 billion pounds, down from 2.710 billion in April, and below the average analyst estimate of 2.690 billion. The range of estimates was 2.660 billion pounds to 2.770 billion pounds.

 

Large speculative traders now hold 92,848 net long positions in CBOT soybean futures and options combined contracts as of June 9, compared with net longs of 88,884 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 131,577 contracts from 130,904 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 204,866 contracts, up from the previous week's 199,275 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 overseas markets, soybean futures fell Monday on the Dalian Commodity Exchange, tracking a retreat in the commodities complex, with rainy weather in China and abroad also bringing supply pressure on agricultural product prices. The benchmark January 2010 soybean contract fell 1.6% to settle at RMB3,650 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday on bearish export estimates, trade participants said. The benchmark August CPO contract on the Bursa Malaysia Derivatives ended MYR65 lower at MYR2,400 a metric tonne.