July 6, 2009

 

CBOT Soy Outlook on Monday: Down 25-30 cents; bearish outside markets, weather

 

 

Soybean futures at the Chicago Board of Trade are expected to start Monday's day session on the defensive, pressured by bearish outside market influences and favorable crop development weather.

 

CBOT soybean futures are seen opening 25 cents to 30 cents lower.

 

Outside markets are lower in early morning trade, with stock indexes lower, crude oil prices sharply lower and the U.S. dollar stronger.

 

"Bearish world economic conditions, reflected in outside markets are negative influences for soy futures, said Vic Lespinasse, analyst with Grainanalyst.com.

 

"The grain and oilseed complex can't stand up to that type of pressure, particularly with near-term weather conditions favorable to developing central U.S. crops," Lespinasse said.

 

However, a tight old crop supply situation and the uncertainty of new crop production with a long growing season still ahead is expected to limit downside losses. Nevertheless, lower price action is on tap, with traders eyeing outside markets midday weather updates for direction.

 

A technical analyst said first resistance for November soybeans is seen at last week's high of US$10.29 1/2 and then at US$10.50. First support is seen at US$10.00 and then at Thursday's low of US$9.88.

 

The DTN Meteorlogix weather forecast has no significant concerns for crops in the Midwest during the next 10 days. A ridge will approach and bring a short period of hot temperatures with it, but then the ridge backs off again.

 

Showers and cooler conditions during the past 24 hours will help ease stress to soybeans in the Delta, Meteorlogix forecasts. However, more rain is needed to end concerns...especially through southern areas where it has been quite hot during the past week, Meteorlogix said in the forecast.

 

On tap for Monday, the 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 deliveries, July soyoil deliveries totaled 3,910 lots. Customer accounts at Man Professional Clearing issued 2,407 lots, while stopping 1,776 lots. The last trade date assigned was July 2.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Monday, with the market entering a phase of consolidation in a wide range after it failed to rebound aggressively last week. The most actively traded January 2010 soybean contract settled RMB32 a metric tonne lower at RMB3,625/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended at a 14-week low Monday in thin trade, with continued selling pressure as concerns over slowing demand from India resurfaced, trade participants said. The benchmark September CPO contract on the Bursa Malaysia Derivatives ended MYR46 lower at MYR2,129 a metric tonne.