September 21, 2009

 

CBOT Soy Outlook on Monday: Lower; dollar strength, near-term weather

 

 

Strength in the U.S. dollar coupled with continued favorable weather for developing Midwest crops are seen pressuring Chicago Board of Trade soybean futures to start Monday's day session.

 

CBOT soybean futures are seen starting 6 cents to 8 cents lower.

 

The firmer dollar is sending bearish signals through commodity markets in general, and with Midwest weather seen beneficial to developing crops, the lower overnight theme is expected to flow into day-session trade.

 

The influence of outside financial market pressure adds to an already weak undertone, and without a frost threat, buyers are taking a cautious approach, a CBOT floor analyst said.

 

However, downside pressure is expected to remain limited, as solid export demand and concerns about nearby supply availability amid harvest delays in the U.S. Delta provide underlying support.

 

A technical analyst said first resistance for November soybeans is seen at US$9.50 and then at Friday's high of US$9.58. First support is seen at Friday's low of US$9.36 and then at US$9.28 1/4.

 

The DTN Meteorlogix weather forecast said crops in the Midwest region will continue to benefit from near- to above-normal temperatures for at least the next five to seven days, probably longer. Wet weather early this week and again later may be unfavorable for maturing crops or any early harvests, especially in the west and south.

 

In the U.S. Delta, very wet weather last week and periods of wet weather during the next seven days is unfavorable to maturing soybeans, Meteorlogix said.

 

In demand news, U.S. Department of Agriculture on Monday announced private export sales of 98,000 metric tonnes of soyoil for delivery to unknown destinations for the 2009-10 marketing year.

 

The U.S. Department of Agriculture 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 overseas markets, soybean futures fell on the Dalian Commodity Exchange Monday, as a frost forecast proved premature and government-stockpile sales continue to buffer prices. The benchmark May 2010 soybean contract settled 0.8% lower at RMB3,706 a metric tonne.