August 28, 2006

 

CBOT Soy Outlook on Monday: Seen down 1 cent, e-CBOT, favorable weather

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session activity on weaker footing, influenced by the overnight theme amid beneficial weather conditions for soybean crops.

 

Soybeans are called to open 1-cent lower.

 

In e-CBOT trade, November soybeans were 1 3/4-cent lower at US$5.55 1/4 per bushel.

 

The market is poised to start lower, as the market is still looking at moisture in the Midwest being good for pod filling crops, said Jason Roose, analyst with U.S. Commodities in West Des Moines, IA.

 

The market continues to factor in the potential for larger soybean crops based on cooler and wetter weather conditions occurring during the soybean crops critical pod filling stage of development, traders said.

 

However, spillover strength from the neighboring wheat and corn markets may lend support to underpin prices, Roose added.

 

Strength in the cash market is seen providing light support to prices, but as the fall harvest approaches, traders will remain cautious of pushing upside moves amid the potential the fresh sales of cash supplies, analysts added.

 

A technical analyst said the market has a bearish advantage, with the next downside price objective for solid technical support at the US$5.50 level. It will take a close above technical resistance at US$5.75 to begin to provide some fresh upside technical momentum.

 

First resistance for November soybeans is seen at US$5.60 and then at US$5.65. First support is seen at US$5.55 3/4--Friday's low--and then at US$5.50.

 

The DTN Meteorlogix forecast said rain and thunderstorms are maintaining adequate soil moisture for filling crops. Showers and thundershowers producing 0.30-1.50 inches of moisture expected Monday will tend to favor the southern and eastern locations of the Midwest. Showers may linger near the Ohio River during Tuesday, with mainly dry conditions seen elsewhere in the region Tuesday. Mainly dry conditions are on tap for Wednesday. Temperatures will average near to mostly below normal Monday and Tuesday, and near to above normal Wednesday.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday. Spot cash soybean bids were up 1-cent in Bloomington Ill, down 1-cent in Frankfort Ind., and up 2 cents in St. Louis, Mo., according to cash sources Monday.

 

Commodity Futures Trading Commission on Friday reported large speculative traders were net short 46,139 combined soybean futures and options contracts as of August 22, compared to net shorts of 48,892 in the previous week. Speculative funds were reported net long soyoil future and options to tune of 37,101 lots, down from 42,839 lots in the prior week. Large speculative traders were reported net short combined futures and options positions in soymeal by 43,246 lots compared to 39,025 contracts last week.

 

Rotterdam soybeans were mostly flat and European vegoils were mixed.

 

Meanwhile, Brazil's two government soy auctions on Friday attracted little interest from both soy crushers and farmers, with just about 23.9% of the 3 million metric tonnes of soy offered sold, said the country's National Commodities Supply Corp., or Conab.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Monday, in line with Friday's losses on the Chicago Board of Trade, analysts said. The most active January 2007 contract settled RMB16 lower at RMB2,536 a metric tonne, after trading between RMB2,532 and RMB2,541/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives settled lower Monday, as market participants liquidated long positions in the absence of fresh fundamental factors and on a fall in crude oil prices. The benchmark November CPO contract settled MYR24 lower at MYR1,575/tonne.