December 1, 2008
CBOT Soy Outlook on Monday: Down 14-16 cents on outside markets, rain in Argentina
The combination of bearish outside market influences and beneficial weekend rains in parched areas of Argentina is seen pressuring Chicago Board of Trade soybean futures in early action.
CBOT soybean futures are called 14 to 16 cents lower.
The firmer U.S. dollar and sharply lower crude oil and precious metal futures will promote the continued deleveraging of commodities, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.
The market still isn't trading on its own fundamentals in the face of global economic uncertainties, Roose added.
Meanwhile, fundamentally bearish rain showers in parched areas of Argentina are expected to aid the defensive tone in the absence of any other directional news to trade on.
In overnight electronic trading, January soybeans ended 15 1/2 cents lower at US$8.67 1/2. January soymeal was US$1.10 lower at US$253.20 per short tonne, while December soyoil ended 39 points lower at 32.51 cents per pound.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above technical resistance at US$9.21 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the November low of US$8.35 1/4.
First resistance for January soybeans is seen at Friday's high of US$8.95 3/4 and then at US$9.00. First support is seen at Friday's low of US$8.70 and then at US$8.50.
The DTN Meteorlogix weather forecast said rain and storms in the Argentine row crop region late last week and early in the weekend greatly improved soil moisture and eased stress to crops, especially after recent very hot weather.
In Brazil, rainfall in the Rio Grande Do Sul region was mostly light during the weekend. This week looks to be drier again, cool at first but warmer again later.
In other news, Brazilian farmers have planted 75% of the new 2008-09 soybean crop as of Nov. 27, consulting firm AgRural said Friday. AgRural said this is slightly below 77% at the same time in 2007 and above 64% on Nov. 20.
December soyoil deliveries totaled 38 lots. A customer account at ADM Investor Services was the primary issuer of 37 lots. The last trade date assigned was Sept. 30.
On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled lower Monday, in line with mild losses on CBOT. China's benchmark May 2009 soybean contract settled 31 yuan lower at RMB3,195 a tonne, after trading in a narrow range of RMB37 a tonne.
Crude palm oil futures on Malaysia's derivatives exchange ended little changed in choppy trade Monday as weak crude oil pressured prices lower and export numbers for November rose, but not enough to propel the market higher. The benchmark November contract on Bursa Malaysia Derivatives ended 4 ringgit lower at MYR1,628 a metric tonne off an intraday high of MYR1,675.