November 16, 2009

 

CBOT Soy Outlook on Monday: Seen up on bullish outside market support

 

 

Soybean futures on the Chicago Board of Trade expected to start Monday's session in positive territory, following the overnight theme on bullish outside market influences.

 

CBOT soybean futures are seen starting 5 to 10 cents higher. In overnight trade, January soybeans were 9 cents higher at US$9.96, and March soybeans were 8 1/2 cents higher at US$10.00 3/4.

 

The U.S. dollar is on the defensive, crude oil, metal and equity futures are all higher, providing a "green light special" for soybean bulls to start the session, said Victor Lespinasse, analyst with Grainanalyst.com.

 

As long as the U.S. dollar is weaker, grains and oilseed futures has underlying support, he added.

 

The absence of any fresh bearish news to offset the outside market support coupled with bullish October crushing data have futures poised for higher price action.

 

However, any reverse in the outside markets will allow bearish supply fundamentals and improving crop conditions in some South American crop areas to weigh on the market.

 

A market technician said first resistance for January soybeans is seen at US$10.00 and then at Friday's high of US$10.09. First support is seen at Friday's low of US$9.83 1/2 and then at US$9.75.

 

The National Oilseed Processors Association said 155.262 million bushels of soybeans were crushed in October. That's up from 107.379 million in September and above the average analyst estimate of 139.1 million. The availability of new crop soybean supplies allowed crushing volume to advance in October amid favorable crushing margins, analysts said. Soyoil stocks were pegged at 2.286 billion pounds, up from 2.261 billion in September and above the average analyst estimate of 2.248 billion.

 

The DTN Meteorlogix Weather forecast said the U.S. Delta will have favorable conditions for field work through Sunday. Showers move in Monday, but it does not look to be too wet.

 

In South America, heavy rains in Brazil's Rio Grande Do Sul likely means planting delays for summer crops. Showers elsewhere in the region will favor early growth of summer crops. Major and minor soybean areas in Argentina from northern Buenos Aires and Cordoba northward should benefit from increasing rain activity, Meteorlogix said.

 

The U.S. Department of Agriculture 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.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday, along with a rise in other commodities amid expectations of inflation. The benchmark September 2010 soybean contract settled RMB22 higher at RMB3,778 a metric tonne.

 

China's soybean imports are likely to rise more than 12% this year to over 42 million metric tonnes, a government think tank said in a report issued Monday. Higher imports in November and December, projected at 3.8 million tonnes and 4 million tonnes, respectively, will help to push annual imports to a record high, the China National Grain and Oils Information Center said in the report.

 

Crude palm oil futures prices on Malaysia's derivatives exchange rose 2.1% Monday, as prices ended above MYR2,300 a metric tonne for the first time in more than two months. Investors covered short positions due to higher exports and stronger crude oil prices in Asia. The February contract on the Bursa Malaysia Derivatives ended MYR48 higher at MYR2,336 a tonne.