November 9, 2009

 

CBOT Soy Outlook on Monday: Outside markets seen underpinning prices

 

 

Bullish influences from outside financial markets is seen lifting Chicago Board of Trade soybean futures at the start of Monday's day session.

 

CBOT soybean futures are seen starting 7 to 10 cents higher. In overnight trade, Nov soybeans were 7 3/4 cents higher at US$9.55 3/4, and Jan soybeans were 7 1/2 cents higher at US$9.62 1/2.

 

Weakness in the U.S. dollar, higher crude oil, metals and U.S. equity futures serve as upside catalysts for the market, analysts said.

 

The evening of positions ahead of Tuesday's U.S. Department of Agriculture crop production report is expected to attract some profit taking on short positions following declines incurred late last week.

 

The outside markets will underpin prices, as weather, harvest activity and light technical weakness would otherwise apply pressure to prices, said Victor Lespinasse, analyst with Grainanalyst.com.

 

The outside markets will be watched closely, as a shift in direction in the dollar and other commodity market influences will impact prices, with many participants taking a cautious approach ahead of Tuesday's crop reports.

 

A market technician said first resistance for January soybeans is seen at US$9.62 and then at US$9.70. First support is seen at Friday's low of US$9.55 and then at US$9.50.

 

The T-storm Weather forecast said mostly dry weather in the central U.S. will accelerate drying and harvesting rates into at least this weekend. Heavy rain associated with Hurricane Ida will only clip soybean areas in the Delta. Temperatures across the central U.S. will average warmer than usual through Friday, aiding drying/harvesting rates, T-storm Weather said.

 

A moderately-strong storm system will affect the central U.S. this weekend, but only a low chance for slowed harvesting rates exists this weekend due to moisture, T-storm Weather added in the forecast.

 

USDA is scheduled to release its weekly export inspections report at 11 a.m., EST, and its weekly crop progress report at 4 p.m., EST.

 

The USDA is scheduled to release its November crop report Tuesday at 8:30 a.m., EST (1330 GMT). Most analysts surveyed anticipate a modest increase in Tuesday's 2009 soybean crop production estimate. On average, 24 analysts participating in a Dow Jones Newswires survey projected a crop size of 3.269 billion bushels with a yield of 42.7 bushels per acre. The averages ranged from 3.187 billion to 3.379 billion bushels for production and 41.6 to 44.1 bushels an acre for yields.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled marginally higher Monday as traders remained cautious ahead of USDA supply and demand report to be issued Tuesday. The benchmark September 2010 soybean contract settled RMB2 a metric tonne higher at RMB3,719/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday as a rise in crude oil in late trade and a likely increase in exports lifted market sentiment, trade participants said. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR20 higher at MYR2,266 a metric tonne.