November 27, 2006

 

CBOT Soy Outlook on Monday: Up 7-10 cents on e-CBOT strength, spec buying

 

 

Chicago Board of Trade soybean futures are expected to open Monday's day session higher, following the overnight trend with speculative buying seen as a featured attraction.

 

Soybean futures are called to open 7 to 10 cents higher.

 

In e-CBOT trade, January soybeans were 9 cents higher at US$6.93 1/4 and March was 10 cents higher at US$7.06 3/4 per bushel.

 

The market is set to extend last week's gains, with speculative buying buoyed by technical support, strength in Asian markets and weakness in the U.S. dollar underpinning prices, analysts said.

 

The market soared to new contract highs overnight, with fears of inflation amid recent declines in the U.S. greenback versus other major currencies raising interest in commodities as a hedge against inflation, analysts added.

 

Meanwhile, solid underlying domestic and export demand is expected to keep prices firm, with a general absence of any significant selling interest keeping speculative buying controlling price direction, a CBOT trader said.

 

A technical analyst said bullish technical momentum remains a dominant force in the market, with the next upside price objective for January futures to close prices above psychological resistance at US$7.00 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 Friday's contract high of US$6.87 and then at US$6.90. First support is seen at US$6.80 and then at Friday's low of US$6.73.

 

U.S. Department of Agriculture said private exporters reported the sale of 30,000 metric tonnes of soybeans to China for delivery to during the 2006/2007 marketing year.

 

On tap for Monday, USDA is scheduled to release its weekly export inspection report 10:00 a.m. CST and weekly crop progress report at 3:00 p.m. CST. The Commodity Futures Trading Commission will release its commitment of traders report at 2:30 p.m. CST; the report was delayed due to last week's Thanksgiving Day holiday.

 

The DTN Meteorlogix weather forecast said thunderstorms moving through Brazil will maintain soil moisture for soybeans in most areas, but especially from Mato Grosso Do Sul southward.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday. Spot cash soybean bids were up 2 cents in Des Moines, IA, and up 2 cents in Peoria, Ill., , according to cash sources Monday.

 

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

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher on price strength in CBOT soybean futures Friday and borrowed support from soyoil futures gains, analysts said. The benchmark May 2007 contract settled RMB62 higher at RMB2,964 a metric tonne.

 

Crude palm oil prices on the Bursa Malaysia Derivatives skyrocketed Monday, hitting the daily upward limit and setting a new high for the year, boosted by the strength of external markets and short-covering, analysts said. The benchmark February contract finished up MYR45 at MYR1,921 a metric tonne, but off its intraday high of MYR1,976/tonne.