August 18, 2008

 

CBOT Soy Outlook on Monday: Seen stronger on outside influence

 

 

Soybean futures on the Chicago Board of Trade are called to open Monday's day session higher, taking their cue from the strong overnight trade and support from outside market influences.

 

CBOT soybean futures are called 25 to 30 cents higher.

 

Looking to increases in crude oil, gold and silver in electronic trading, soy products are due to rise 25-30 cents, a CBOT floor trader said.

 

"We're retracing what we did Friday; we sold off a little too hard," he said.

 

With dry Midwestern weather sporting temperatures in the upper 80s forecast through the weekend, it's fair to include a little weather premium back in the market, the trader said.

 

Strength in the crude palm oil trade is also supportive, the trader added.

 

In overnight electronic trading, September soybeans were 28 3/4 cents higher at US$12.40 1/4 and November soybeans were 30 cents lower at US$12.49. December soyoil was 90 points higher at 51.73 cents per pound and December soymeal was US$10 higher at US$342.70 per short tonne.

 

A market technician said "the bulls are fading again, technically," after a solidly lower close Friday. But the first upside resistance of US$12.40 was surpassed in overnight trading.

 

The upside price resistance is seen at US$12.50 a bushel, whereas the bears must pierce the US$11.68 per bushel level to penetrate solid technical support, the technician said.

 

The DTN Meteorlogix weather forecast said warmer, drier conditions will help filling corn and soybeans, but that southern Minnesota is looking "too dry."

 

In the Delta, recent showers improved the outlook, but "more rain is still needed," the forecast said.

 

Warm weather is on the horizon, so any cooler weather later this week or this weekend should be short lived, DTN said.

 

"Forecasts for somewhat drier weather over the next two weeks could add some support to beans this morning, but the outlook doesn't yet look too threatening," Farm Futures senior editor Bryce Knorr wrote in a morning commentary. "And, without help from crude oil, bears may still try to force the market to new lows."

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.

 

Index funds trimmed their net long CBOT soybean futures and options positions combined, which now totals 142,389 contracts as of Aug. 12, down from 149,100 the prior week, according to the Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Traditional large speculative traders were net long 38,822 contracts compared with net longs of 50,479 in the previous week. Commercials held net short combined futures and options positions totaling 147,591 contracts, down from the previous week's 165,275 contracts.

 

In overseas markets, Soybean futures traded on China's Dalian Commodity Exchange settled sharply higher Monday as many traders feel the bottom has been reached following a recent tumble.

 

The benchmark January 2009 soybean contract settled RMB116 higher at RMB4,180 a metric tonne, or up 2.9%, after trading in a wide range of RMB4,083-RMB4,238/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 1.3% higher Monday amid short covering in mostly rangebound trade, participants said.

 

The benchmark November contract on Bursa Malaysia Derivatives ended MYR33 higher at MYR2,485 a metric tonne, after reaching an intraday low of MYR2,408.