November 20, 2006

 

CBOT Soy Outlook on Monday: Up sharply on tech buys, corn spillover

 

 

Soybean futures on the Chicago Board of Trade are expected to open Monday's day session on strong footing, buoyed by technical buying associated with overnight strength and spillover momentum from corn.

 

Soybean futures are called to open 13 to 15 cents higher.

 

In e-CBOT trade, January soybeans were 14 1/2 cents higher at US$6.75 and March was 15 cents higher at US$6.87 3/4 per bushel.

 

The market is poised to follow the overnight theme, with a strong technical reaction to Friday's firm close, the supportive outside influence of sharply higher corn futures and seasonal buying serving as the catalysts for the gains, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

An overnight rally in corn fueled the impressive gains in soybeans, with price strength seen across global grain and oilseed markets aiding as well, a CBOT floor analyst said.

 

A technical analyst said the next upside price objective for January soybeans is to close prices above solid chart resistance at US$6.70 a bushel. The next downside price objective is closing prices below solid support at US$6.50. First resistance for January soybeans is seen at US$6.65 and then at US$6.70. First support is seen at Thursday's low of US$6.55 and then at last week's low of US$6.51 1/2.

 

Meanwhile, soyoil futures are expected to open sharply higher, supported by an overnight run to new contract highs, limit up price moves in palm oil futures and optimistic long term biodiesel demand prospects, analysts added.

 

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 p.m. CST.

 

Commodity Futures Trading Commission on Friday reported large speculative traders were net long 45,291 combined soybean futures and options contracts as of Nov. 14, compared with net longs of 42,379 in the previous week. Speculative funds were reported net long soyoil futures and options to tune of 64,431 lots, compared with net longs of 47,907 lots in the prior week. Large speculative traders were reported net long combined futures and options positions in soymeal by 32,866 lots, compared with net longs of 30,796 contracts last week.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday. Spot cash soybean bids were up 5 cents in Keokuk, Iowa, down 8 cents in Peoria, Ill., and down 4 cents in St. Louis, according to cash sources Monday.

 

Rotterdam soybeans were mostly higher and soymeal was higher. European vegoils were higher.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Monday, supported by Friday's gains in CBOT soybean futures, analysts said. The most active May 2007 contract settled RMB59 higher at RMB2,972 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives reached their daily upward price limit Monday as the market ignored weak export data to ride on gains in related commodities such as soybeans and corn. The benchmark February CPO contract ended at a fresh 30-month high of MYR1,864 a metric, up MYR100 from Friday.