August 3, 2009

 

CBOT Soy Outlook on Monday: Up sharply; outside markets, weather threat

 

 

Chicago Board of Trade soybean futures are poised for a sharply higher start to Monday's day session, with buyers energized by bullish influences from other financial markets and from weather concerns.

 

CBOT soybean futures are expected to open 40 cents to 50 cents a bushel higher.

 

CBOT soybean prices were mixed overnight. August was 48 3/4 cents a bushel higher at US$11.82 3/4 while November climbed 43 1/2 cents to US$10.25 1/2.

 

Strong gains in crude oil, metals, equities coupled with weakness in the U.S. dollar are adding a bullish component to the market.

 

A potential weather threat for Midwest crops amid warmer drier 6-to-10 day forecasts are adding a supportive fundamental feature, with underlying export demand expected to buoy prices as well, said Victor Lespinasse, analyst with Grainsanalyst.com.

 

The market is adding risk premium to prices with worries of dry conditions during the soybean crop's critical pod filling stage of development and concerns about a weak Indian monsoon aiding the firm tone.

 

The market is filled with bullish attributes ahead of Monday's day session, but traders will eye movement in outside markets and midday weather models for clues to the sustainability of the rally, analysts said.

 

A technical analyst said first resistance for November soybeans is seen at Thursday's high of US$9.84 1/2 and then at US$10.00. First support is seen at US$9.64 and then at US$9.50.

 

DTN Meteorlogix said episodes of scattered showers and thunderstorms during the next five days in the U.S. Midwest will continue to favor the crop. Meanwhile, Midwest weather will turn hot and drier in the six-to-10-day period.

 

In demand news, private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of soybeans for delivery to an unknown destination during the 2009/2010 marketing year, the USDA said Monday.

 

August soyoil deliveries totaled 3,372 lots. Customer accounts at Man Professional Clearing issued 1,631 lots while stopping 1,521 lots. The last trade date assigned was July 31.

 

On tap for Monday, the USDA 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 markets outside the U.S., soybean futures traded on the Dalian Commodity Exchange settled higher Monday, tracking Friday's rise on CBOT. The benchmark May 2010 soybean contract settled RMB81 a metric tonne higher at RMB3,671/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange rose by as much as 4.9% Monday as traders covered short positions and rallying crude and soyoil lent support to prices, trade participants said. The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR106 higher at MYR2,295 a metric tonne.