October 12, 2009

 

CBOT Soy Outlook on Monday: Up; weather issues, supportive outside markets

 

 

Soybean futures on the Chicago Board of Trade are expected to climb Monday, underpinned by weather delayed harvest progress and supportive outside market influences.

 

CBOT soybean futures are seen starting 14 to 17 cents higher. In overnight trade, Nov soybeans were 17 cents higher at US$9.81.

 

Wet, cold weather on tap for the Midwest this week is seen stymieing harvest operations in the Midwest. Meanwhile, immature crops across the crop belt were potentially damaged by weekend frosts and should provide fundamental strength for prices, analysts said.

 

The harvest delays are seen slowing grain and oilseed movement to export locations, as the cash market continues to scramble for new crop supply, AgResource Co. said in a market note.

 

Traders and analysts are also raising concerns about disease issues in the U.S. Delta. Late season weather has taken its toll on selected soybean crops in the south, with warm, humid and wet conditions in the region on average causing 10% to 15% yield lost due to disease damage.

 

Speculative buying is seen buoying prices also, as funds use commodities as inflationary hedges amid weakness in the U.S. dollar. In early market action, the U.S. dollar is lower while crude oil, gold and silver futures push higher.

 

A technical analyst said first resistance for November soybeans is seen at Friday's high of US$9.68 1/2 and then at US$9.77 3/4. First support is seen at US$9.50 and then at US$9.40.

 

The DTN Meteorlogix weather forecast said a season-ending hard freeze occurred through most crop areas west of the Mississippi and some areas to the east during the weekend. Rain and snow on tap for the week is unfavorable for maturing crops and likely delays the harvest.

 

In the Delta, episodes of rain and cool weather will continue for the next 3-4 days. This further delays the crop harvests and is unfavorable for mature crops, Meteorlogix said.

 

U.S. Department of Agriculture weekly export inspections and crop progress reports normally released on Monday's will be delayed until Tuesday's amid the U.S. government's closure in observance of the Columbus Day holiday.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange jumped Monday, supported by weather concerns in major U.S. producing areas. The benchmark May 2010 soybean contract settled RMB65 a metric tonne higher at RMB3,674/tonne, up 1.8%.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday amid a commodities rally and price-supportive export figures, market participants said. The benchmark December contract on Bursa Malaysia Derivatives ended up MYR62 at MYR2,147 a metric tonne.