August 27, 2007

 

CBOT Soy Outlook on Monday: Down 6-8 cents; e-CBOT, drier weather conditions

 

 

Soybean futures on the Chicago Board of Trade are seen starting Monday's day session lower, taking its cue from overnight activity, with less threatening weather conditions applying pressure.

 

CBOT soybean futures are called to start the session 6 to 8 cents lower.

 

In overnight e-CBOT trading, September soybeans were 7 1/2 cents lower at US$8.41 1/2, and November soybeans were 8 1/4 cents lower at US$8.56 3/4.

 

The trade is expected to shed some premium from prices amid less threatening weather conditions across the Midwest, analysts said.

 

Drier conditions across most of the soybean belt and reports of recent rains benefiting crops in drier areas of the crop belt recently is expected to take some edge off prices, traders said.

 

A quiet news front is expected to keep activity subdued with traders keying in on technical objectives for near term direction, a CBOT floor broker said.

 

A technical analyst said the next upside price objective for November soybeans is pushing prices above solid technical resistance at US$8.70. The next downside price objective is closing prices below solid support at US$8.50.

 

First resistance for November soybeans is seen at last week's high of US$8.67 and then at US$8.70. First support is seen at US$8.60 and then at Friday's low of US$8.54.

 

The DTN Meteorlogix Weather Service forecast said scattered thunderstorm activity in the U.S. Midwest during the middle of the week is not expected to be very heavy. Weekend showers over Missouri and central Illinois were favorable but more rain is still needed. In the U.S. Delta, hot, dry weather continues to stress late filling soybeans. The outlook for late this week and this weekend is not as hot but it is also not as cool looking as was thought late last week, Meteorlogix said.

 

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 150,944 combined soybean futures and options contracts as of Aug. 21, up from 150,860 the prior week. Traditional large speculative traders were net long 68,770 contracts compared with net longs of 91,549 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 188,050 contracts, down from the previous week's 220,710 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, soybean futures traded on the Dalian Commodity Exchange settled mixed Monday, as the market waited for new incentives to trade on. The benchmark May 2008 soybean contract settled RMB5 lower at RMB3,648 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Monday amid weak fundamentals, market participants said. The benchmark November contract at the Bursa Malaysia Derivatives exchange ended at MYR2,421/tonne, down MYR9 from the previous close.