November 6, 2006

 

CBOT Soy Outlook on Monday: Seen up 1-2 cents; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Monday's open auction session modestly higher, following the lead of overnight price action.

 

Soybean futures are called to open 1 to 2 cents higher.

 

In e-CBOT trade, November soybeans were 2 cents higher at US$6.51 and January was 1 1/4-cent higher at US$6.64 per bushel.

 

The market is poised to follow the overnight theme, with expected price strength in neighboring grain futures helping promote upside movement, analysts said.

 

A quiet news front continues to keep futures focusing on technical factors with perceptions that soybeans need to rally with corn in order limit the amount of U.S. acres lost to corn next year an underlying theme for the market, analysts added.

 

Traders said upside movement remains the path of least resistance, as selling remains limited on perceptions that large speculative traders will continue to buy any weakness in the market.

 

A market technician said Thursday's contract high of US$6.82 basis the January future is very strong overhead chart resistance for the market to overcome. However market bulls still have a technical advantage. The next upside price objective is to close prices above solid chart resistance at the contract high. The next downside price objective is closing prices below solid support at US$6.35.

 

First resistance for January soybeans is seen at US$6.65 and then at US$6.70. First support is seen at Friday's low of US$6.58 and then at US$6.55.

 

Commodity Futures Trading Commission on Friday reported large speculative traders were net long 32,353 combined soybean futures and options contracts as of Oct. 31, compared with net longs of 26,840 in the previous week. Speculative funds were reported net long soyoil futures and options to tune of 36,026 lots, compared with net longs of 33,292 lots in the prior week. Large speculative traders were reported net long combined futures and options positions in soymeal by 21,805 lots, compared with net longs of 4,948 contracts last week.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspection 10 a.m. CST and crop progress reports at 3:00 p.m. CST.

 

In deliveries, a total of 1,721 delivery notices recirculated against the November soybean future. Issuers and stoppers were widely scattered among various commission houses. The last trade date assigned was Nov. 3.

 

U.S. midwest cash soybean basis bids are mostly unchanged Monday. Spot cash soybean bids were up 1-cent in Bloomington, Ill, down 1-cent in Evansville, Ind, and up 1-cent in St. Louis MO., according to cash sources Monday.

 

Rotterdam soybeans were higher and soymeal were mixed. European vegoils were mixed.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Monday, supported by Friday's gains in CBOT soybeans, an analyst said. The May 2007 contract was unchanged, settling at RMB2,820 a metric tonne after trading between RMB2,808 and RMB2,831/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives Monday continued a rally that began last week, supported largely by technical factors and upbeat market sentiment. The benchmark January contract settled up MYR15 at MYR1,708 a metric tonne, after touching a high of MYR1,721/tonne early in afternoon trading.