November 19, 2007

 

CBOT Soy Outlook on Monday: Up 7-10 cents on export demand, outside markets

 

 

Chicago Board of Trade soybean futures are expected to start Monday's day session on firm footing, taking its cue from overnight trade amid bullish momentum and strong underlying demand, analysts said.

 

The U.S. dollar index is lower, crude oil and metal futures are higher.

 

CBOT soybean futures are called to start the session 7 to 10 cents higher.

 

In overnight e-CBOT trading, January soybeans were 11 1/4 cents higher at US$10.89 per bushel, and March soybeans were 11 1/4 cents higher at US$11.05.

 

A bullish market trend coupled with strong buying interest from China is serving as the catalysts for the higher start, analysts said.

 

An otherwise quiet news front is keeping attention on export demand and outside market influences, analysts added.

 

Fresh demand and outside markets will continue to underpin prices, but traders warn of possible thinner volume volatility as the market heads into Thursday's U.S. Thanksgiving holiday.

 

U.S. Department of Agriculture announced Monday private exporters reported export sales of 221,000 metric tonnes of soybeans for delivery to China during the 2007-08 marketing year.

 

Meanwhile, Chinese companies have reportedly booked 14-16 cargoes of soybean import shipments in the previous week, up from around 11 cargoes in the preceding week, said an analyst report by Shanghai JCI late Friday.

 

A technical analyst said the next upside price objective for January soybeans is to push and close prices above major psychological resistance at US$11.00 a bushel. The next downside price objective is closing prices below strong support at US$10.62 1/4, which is the bottom of an upside price gap on the daily bar chart.

 

First resistance for January soybeans is seen at Friday's contract high of US$10.88 and then at US$11.00. First support is seen at US$10.70 1/2 and then at US$10.62 1/2.

 

Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds held net long positions totaling 174,096 combined CBOT soybean futures and options contracts as of Nov. 13, up from 173,868 the prior week. Traditional large speculative traders were net long 131,013 contracts compared with net longs of 125,812 in the previous week. Commercials held net short combined futures and options positions totaling 266,395 contracts, up from the previous week's 263,708 contracts.

 

On tap for Monday, USDA is scheduled to release its weekly export inspections report at 11:00 a.m. EST and weekly crop progress reports at 4:00 p.m. EST.

 

The DTN Meteorlogix Weather Service said wet weather in Brazil's Rio Grande do Sul and Parana states is disrupting some planting and may force some replanting. The next significant rain event appears to be during the coming weekend are forecast for Mato Grosso.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday, as market players anticipate lower cash prices because the government could introduce policies to curb price gains. However, the benchmark September 2008 soybean contract settled RMB6 higher at RMB4,546 a metric tonne.

 

Crude palm oil futures traded on the Bursa Malaysia Derivatives settled higher Monday, largely on expectations of improved export performance and Friday's gains in CBOT soy oil futures. The benchmark February contract settled MYR46 higher at MYR2,950 a metric tonne.