November 3, 2008
CBOT Soy Outlook on Monday: Up 6-8 cents; overnight theme, dollar influence
Weakness in the U.S. dollar and a firm tone in overnight price action have Chicago Board of Trade soybean futures poised for a higher start to Monday's day session.
CBOT soybean futures are called 6-to-8 cents higher.
In overnight electronic trading, November soybeans were 8 3/4 cents higher at US$9.34, January soybeans were 8 1/2 cents higher US$9.41 1/2. December soyoil was 122 points higher at 34.82 cents per pound and December soymeal was US$3.80 higher at US$276.80 per short tonne.
A quiet news front will keep traders eyeing outside markets, with the U.S. dollar a key influence, analysts said.
Otherwise, limit up price action in Malaysian palm oil and bullish underlying fundamentals amid solid demand and tight supplies attributed to slow farmer selling is expected to keep futures recovering from prior losses, analysts added.
Traders are also expected to begin looking ahead to next week's crop reports, as private estimates start to roll into the market. FC Stone a commodity risk management firm is scheduled to release its latest crop production estimates for corn and soybeans Monday near 4:30 p.m. EST.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above major psychological resistance at US$10.00 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$9.00.
First resistance for January soybeans is seen at Friday's high of US$9.49 and then at last week's high of US$9.74. First support is seen at Friday's low of US$9.17 3/4 and then at US$9.00.
A total of 712 contracts were delivered against the CBOT November soybean futures contract. A customer account at MF Global issued 328 lots, with a customer account at Tenco the primary stopper with 597 lots. The last trade assigned was October 21.
The DTN Meteorlogix weather forecast said wet and cool conditions return to the U.S. Midwest during the week, but not before 2-3 dry and very warm days. Harvesting continues early this week, but may be slowed later in the week.
Meanwhile, traditional large speculative traders now hold 7,641 net long positions in CBOT soybean futures and options combined contracts as of Oct. 28, compared with net shorts of 2,231 in the previous week. Index funds trimmed their net long positions, which now total 103,598 contracts, down from 107,839 the prior week, according to the Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Commercials held net short combined futures and options positions totaling 87,930 contracts, up from the previous week's 79,463 contracts.
U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday at 11 a.m. EST and its weekly crop progress report at 4 p.m. EST.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday, supported by sharply higher soyoil prices. Soyoil cash prices jumped in northern and eastern China Monday, as processing plants limited supplies, traders said. The benchmark May 2009 soybean contract settled RMB65, or 2%, higher at RMB3,389/tonne.
Crude palm oil futures on Malaysia's derivatives exchange ended at its upper limit of 10% for the day toward the close of trading Monday on strong buying, short-covering and supportive leads from soybean oil. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR151 higher at a 13-day high of MYR1,666 a metric tonne.