September 4, 2007

 

CBOT Soy Outlook on Tuesday: Up 10-13 cents; e-CBOT, wheat influence

 

 

Day session Chicago Board of Trade soybean futures are expected to start the trading week with a firm undertone, taking its cue from overnight action and spillover strength from an expected price surge in wheat futures, analysts said.

 

CBOT soybean futures are called to start the session 10 to 13 cents higher.

 

In overnight e-CBOT trading, September soybeans were 8 1/2 cents higher at US$8.76 1/2, and November soybeans were 13 1/4 cents higher at US$8.95 3/4.

 

The market will be a follower of wheat futures to start the day, as that market continues to dictate price trends across the CBOT grain complex in the absence of fresh fundamental news, said Don Roose, president of U.S. Commodities in West Des Moines Iowa.

 

December wheat futures are called to open at its upper daily trading limit of 30 cents per bushel.

 

Meanwhile, some early harvest activity in the U.S. Delta will keep traders listening for yield results, while lingering concerns for the potential for lower production forecasts from next week's U.S. Department of Agriculture product report following variable August weather conditions should underpin prices as well, analysts added.

 

A technical analyst said the market last week gained good upside technical momentum. The next upside price objective for November soybeans is pushing and closing prices above major psychological resistance at US$9.00. The next downside price objective is closing prices below solid support at US$8.62.

 

First resistance for November soybeans is seen at Friday's high of US$8.94 and then at US$9.00. First support is seen at Friday's low of US$8.82 and then at US$8.77.

 

The DTN Meteorlogix Weather Service forecast said a recent warm and dry spell in the U.S. Midwest is helping to improve the condition of maturing crops in the west and north while continuing to stress filling crops in the east and south. Cooler and somewhat wetter weather is possible during a 10-day period.

 

In the U.S. Delta, recent shower activity through southern areas is probably too late to help crops that were hurt by extremely dry and hot August weather, Meteorlogix reported.

 

September soybean deliveries totaled 1,555 lots. The house account at ADM Investor Services was the primary issuer of 753 lots, while a customer account at Man Professional Clearing was the primary stopper of 693 lots. The last trade date assigned was August 31.

 

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 152,234 combined soybean futures and options contracts as of Aug. 28, up from 150,944 the prior week. Traditional large speculative traders were net long 84,717 contracts compared with net longs of 68,770 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 205,583 contracts, up from the previous week's 188,050 contracts.

 

On tap for Tuesday, USDA 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 demand news, private exporters reported to the USDA export sales of 42,000 metric tonnes of soybean Oil for delivery to unknown destinations during the 2007-2008 marketing year, the USDA said Tuesday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly higher Tuesday, on tight supply and rising import costs. The benchmark May 2008 soybean contract settled RMB87 higher at RMB3,884 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday shedding gains seen during the day as traders rushed to take profits, market participants said. The November contract ended at MYR2,459/tonne, down MYR15 and quite near the intraday low of MYR2,457/tonne.