October 19, 2009

 

CBOT Soy Outlook on Monday: Up 8-10 cents; rains to slow harvest potential

 

 

Soybean futures on the Chicago Board of Trade are expected to start Monday's day session higher, in tune with overnight trade, as concerns about harvest opportunities underpin prices.

 

CBOT soybean futures are seen starting 8 to 10 cents higher. In overnight trade, November soybeans were 10 1/4 cents higher at US$9.87 3/4.

 

Forecasts showing rains returning to disrupt harvest operations in the Midwest and southern areas are raising fears of lingering supply tightness.

 

"The forecast looks to continue to present challenging weather for harvest across the Midwest in the next week to 10 days," said Midwest Marketing Solutions' Brian Hoops in a market note.

 

Mild support is seen from weakness in the U.S. dollar, but mixed signals from other outside markets are expected to keep attention on the weather.

 

"The market is still weather sensitive based on current harvest progress, but action in outside financial markets will be watched closely," said Vic Lespinasse, analyst with Grainanalyst.com.

 

A technical analyst said first resistance for November soybeans is seen at US$10.00 and then at last week's high of US$10.12 1/4. First support is seen at US$9.71 and then at US$9.60.

 

The DTN Meteorlogix weather forecast said drier weather in the U.S. Midwest at this time will favor some harvest progress before significant rains during mid week disrupts the harvest again. Drier weather returns toward the end of the week, but more rain is expected early next week.

 

In the Delta, dry weather looks to continue through Wednesday before rain or thunderstorms arrive Thursday. Temperatures should be warmer into Thursday, allowing some improvement in harvest conditions, Meteorlogix said.

 

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, China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday, amid expectations for higher commodities prices tracking a recovering economy. The benchmark May 2010 soybean contract settled RMB28 higher at RMB3,728 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday on expectations of an increase in exports, but weak crude oil futures during the late afternoon trimmed earlier gains, said market participants. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR19 higher at MYR2,197 a metric tonne.