October 1, 2007

 

CBOT Soy Outlook on Monday: Up 4-5 cents; rebounding from Friday's setback

 

 

Chicago Board of Trade soybean futures are expected to start Monday's day session on firm footing, following the overnight theme as the market rebounds from Friday's setback.

 

CBOT soybean futures are called to start the session 4 to 5 cents higher.

 

In overnight e-CBOT trading, November soybeans were 5 cents higher at US$9.96 1/4, and January soybeans were 5 1/4 cents higher at US$10.13 3/4.

 

The bullish underlying theme of tightening stocks, strong global demand and the need to secure additional soybean acres will again serve as the catalyst to underpin prices, analysts said.

 

Spillover support from wheat is seen adding strength, as the market gets its bearings after end of the month/quarter profit taking weighed on prices Friday, analysts added.

 

Light pressure from declines in outside inflationary markets amid a firmer U.S. dollar early Monday is seen limiting advances, but with bullish fundamental and technical outlooks sellers are expected to remain on the run, a CBOT floor analyst added. Lingering concerns about a dry start to the Brazilian planting season is seen a supportive feature as well, he added.

 

A market technician said no chart damage occurred on Friday's setback. Bulls still have the solid technical advantage, as soybean futures remain in a steep uptrend from the August low, with no strong technical signs of a market top being in place. The next upside price objective for November soybeans is to push and close prices above solid resistance at the contract high of US$10.17 1/2 a bushel. The next downside price objective is closing prices below solid support at last week's low of US$9.70 1/4.

 

First resistance for November soybeans is seen at US$10.00 and then at Friday's high of US$10.08. First support is seen at Friday's low of US$9.85 1/2 and then at US$9.79.

 

The DTN Meteorlogix Weather Service forecast said dry weather and near to above normal temperatures continue in the northern Mato Grosso. Little change in the forecast is expected during the next 7-10 days. Any significant soybean planting cannot take place until the rains arrive, Meteorlogix added.

 

October soyoil deliveries totaled 4,155 lots. The house account at ADM Investor Services issued of 2,399 lots, and the house account at Term Commodities issued 102 lots. A customer account at RJ O'Brien was the primary stopper of 1,153 lots. The last trade date assigned was Sept. 28.

 

October soymeal deliveries totaled 414 lots. A customer account at RJ O'Brien was the primary issuer of 288 lots, and a customer account at Fortis stopped 259 lots. The last trade date assigned was Sept. 27.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that traditional large speculative traders were net long 113,799 contracts compared with net longs of 105,752 in the previous week. Index funds were reported to hold net long positions totaling 159,857 combined soybean futures and options contracts as of Sept. 25, up from 157,775 the prior week. Commercials were reported to hold net short combined futures and options positions totaling 239,808 contracts, up from the previous week's 230,712 contracts.

 

On tap for Monday, USDA is scheduled to release its weekly export inspections report at 11:00 a.m. EDT and weekly crop progress reports at 4:00 p.m. EDT.

 

In other news, South Korea's Nonghyup Feed Inc. bought 45,000 metric tonnes of optional-origin corn and up to 60,000 tonnes Indian soymeal in a tender concluded late Friday, a company official said Monday.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended lower Monday on a strengthening ringgit against the U.S. dollar and weaker soyoil prices at CBOT, market participants said. The benchmark December contract at the Bursa Malaysia Derivatives ended MYR26 lower at MYR2,618 a metric tonne after reaching an intraday low of MYR2,615/tonne.