CBOT Soy Outlook on Monday: Seen higher on wet weather, dollar weakness

 

 

CBOT soybean futures are seen starting 4 cents to 6 cents higher. In overnight trade, November soybeans were 3 1/4 cents higher at US$10.09 1/4, and January soybeans were 4 1/2 cents higher at US$10.12.

 

The primary strength of the market is tied to cool, wet weather slowing harvest activity, said Don Roose, president of U.S. Commodities Inc.

 

Farmers are expected to make some scattered harvest progress this week, but activity will remain slow.

 

The weather pattern is unfavorable for harvest activity, with some light rains in the next day or so and then another heavy rainfall event the second half of this week, said Brian Hoops, president of Midwest Market Solutions.

 

Meanwhile, outside market support will aide the higher tone, with a lower U.S. dollar an underpinning feature for commodities in general.

 

However, solid South American planting progress and historically high cash prices at harvest time attracting farmer sales is seen applying some pressure to limit upside moves.

 

The lack of a carry in spreads and firm cash basis levels are not providing any incentive for farmers to store soybeans at this point, Roose said.

 

A technical analyst said first resistance for November soybeans is seen at US$10.15 and then at Friday's high of US$10.28. First support is seen at US$10.00 and then at US$9.94.

 

The DTN Meteorlogix weather forecast said rain, thunderstorms, wind and some snow will likely lead to continued harvest delays for the Midwest region during the last part of this week.

 

In the Delta, further problems for the harvesting of crops is on tap this week, with showers and some rain Tuesday followed by rain and storms later in the week, Meteorlogix added.

 

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 traded on the Dalian Commodity Exchange settled higher Monday, along with other commodities. The September 2010 soybean contract settled up RMB16 a metric tonne at RMB3,727/tonne.

 

China's soybean imports in September fell 33% on year to 2.75 million metric tonnes, the General Administration of Customs said Monday. In the January-September period, soybean imports rose 13% to 32.36 million tonnes.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday, easing from last week's rally as supportive leads from higher exports were offset by profit-taking, trade participants said. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR20 lower at MYR2,218 a metric tonne.