November 12, 2007

 

CBOT Soy Outlook on Monday: 8-10 cents lower on crude oil, metals weakness

 

 

Chicago Board of Trade soybean futures are predicted to open 8-10 cents lower Monday, following the tone established in overnight markets as lower values for crude oil, palm oil and metals futures are expected to pressure day session values at the opening, analysts said.

 

In overnight e-CBOT trading, January declined 8 1/4 cents to US$10.47 3/4 per bushel. e-CBOT volume in January was 5,369 contracts.

 

Crude oil is lower, the metals are lower, and the dollar is higher, "that's the whole ball game," and soybeans should open to the downside as a result, a trader said.

 

Palm oil futures were sharply lower overnight as well and should also weigh on prices and the weather in South America is favorable for crop development which should limit buying interest with the government closed for the holiday, which is expected to limit interest, an analyst said.

 

Dry weather is expected in Brazil on Monday and Tuesday with showers and thundershowers expected to redevelop on Wednesday, DTN Meteorlogix Weather said.

 

In Argentina, light showers are possible Tuesday before dry weather returns Wednesday with below or well below normal temperatures expected Wednesday, Meteorlogix Weather said.

 

On daily technical charts, January soybeans set another new life of contract high and closed near the session high Friday. The market will continue to follow the outside markets with bulls having the near term technical advantage, a technical analyst said.

 

The next major upside price objective is to push and close prices above US$11.00 per bushel. The bears next downside objective is to close prices below solid support at US$10.25, which is the bottom of an upside price gap on the daily bar chart.

 

First resistance is seen at Friday's contract high of US$10.57 and then at US$10.75. First support is seen at US$10.50 and then at US$10.40.

 

Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds held net long positions totaling 173,868 combined CBOT soybean futures and options contracts as of Nov. 6, up from 171,668 the prior week. Traditional large speculative traders were net long 125,812 contracts compared with net longs of 157,632 in the previous week. Commercials held net short combined futures and options positions totaling 263,708 contracts, up from the previous week's 250,152 contracts.

 

Deliveries posted against the November future totaled 99 contracts Monday. The house account of Term Commodities issued all 99 contracts with the customer account of Bank of America stopping 95 contracts and the house account of Rosenthal stopping 4 contracts. The last trade date assigned was Oct. 26.

 

In overseas markets, crude palm oil futures finished sharply lower on the Bursa Malaysia Derivative Exchange with the benchmark January contract down MYR71 lower at MYR2,919/tonne. Higher monthly palm oil stocks and lower exports helped drag prices lower, analysts said.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange settled higher following Friday's gains in CBOT futures. The benchmark May 2008 contract settled RMB22 higher at RMB4,513 per metric tonne.

 

The weekly export inspections and crop conditions reports will be released Tuesday due to the government closed for Veterans Day.