June 25, 2007

 

CBOT Soy Outlook on Monday: Up 1-2 cents; following e-CBOT theme

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session on slightly firmer footing, taking their cue from overnight action with longer range supportive outlooks underpinning prices.

 

CBOT soybean futures are called to start the session 1 to 2 cents higher.

 

In overnight e-CBOT trading, July soybeans were 2 1/2 cents higher at US$7.99 1/2 per bushel, and November was 1 3/4 cents higher at US$8.32 1/2.

 

The market is poised to find some stability after last week's sharp declines, with longer term weather uncertainties for the eastern Midwest and bullish long range fundamental outlooks providing support, analysts said.

 

After dropping 50 cents in the previous week, futures are due to stabilize, with pre delivery, acreage and quarterly stocks report positioning expected to be featured attractions, traders said. However, spillover weakness from neighboring grains will apply pressure, with traders keeping a close eye on weather outlooks, analysts added.

 

A technical analyst said chart damage was inflicted last week and the bears have fresh downside technical momentum on their side. However, market bulls do still have the overall technical advantage. The next upside price objective for November soybeans is pushing prices above solid technical resistance at US$8.47 1/2, which would fill on the upside Friday's downside price gap on the daily bar chart. The next downside price objective is closing prices below solid support at US$8.20.

 

First resistance for November soybeans is seen at US$8.35 and then at US$8.40. First support is seen at Friday's low of US$8.25 and then at US$8.20.

 

The DTN Meteorlogix Weather Service forecast said recent rainfall and cooler temperatures have maintained favorable growing conditions for crops in the western Midwest, although parts of Minnesota are still too dry.

 

In the eastern Midwest, recent shower and thundershower activity has helped to ease moisture stress to developing corn and soybeans, especially in Illinois and western Indiana. It is still too dry over northern and eastern Indiana, Ohio and Michigan. This region will continue to remain the area most threatened by less than favorable weather, 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 141,923 combined soybean futures and options contracts as of June 19, down from 141,971 the prior week.

 

Traditional large speculative traders were net long 117,276 contracts compared with net longs of 115,280 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 236,484 contracts, down from the previous week's 239,309 contracts.

 

On tap for Monday, 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 slightly lower Monday, tracking losses in soyoil futures, though trading activity was largely slow and uneventful. The benchmark September CPO contract ended at MYR2,372 a metric tonne, down MYR8 from Friday.

 

On Singapore's Joint Asian Derivatives Exchange, volume remained thin at 38 lots. September CPO ended at US$688.00/tonne, down US$2 from Friday.

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Monday, as domestic demand could be lower than traders had expected in the second half of this year due to a slow recovery in the feedmeal sector. The benchmark January 2008 soybean contract settled RMB17 lower at RMB3,227 a metric tonne.