December 3, 2007
CBOT Soy Outlook on Monday: Lower; follows e-CBOT, weak outside markets
Chicago Board of Trade soybean futures are seen starting Monday's day session lower, following the overnight theme, with weakness in outside markets and a lack of fresh news weighing on prices.
Crude oil futures and metal futures are lower in early action, with the U.S. dollar index lower as well.
CBOT soybean futures are called to start the session 5 to 7 cents lower.
In overnight e-CBOT trading, January soybeans were 7 1/2 cents lower at US$10.72 1/2 per bushel, and March soybeans were 7 1/2 cents lower at US$10.90.
In the absence of fresh supportive news, beneficial weekend rains in Argentina and a lower tone in outside markets, futures are poised to continue Friday's setback, analysts said.
The overnight session should lend direction, with traders eyeing outside markets and technical levels for further clues for future price movement, analysts added.
A technical analyst said follow-through selling pressure Monday would likely produce some near-term chart damage in soybean futures. The next upside price objective for January soybeans is to push and close prices above solid resistance at the contract high of US$11.09 1/2 a bushel. The next downside price objective is closing prices below strong support at US$10.62 1/4, which would fill an upside price gap on the daily bar chart.
First resistance for January soybeans is seen at US$10.90 and then at Friday's high of US$10.85. First support is seen at Friday's low of US$10.75 1/2 and then at US$10.70.
The DTN Meteorlogix Weather Service said hotter, drier weekend weather favored the ongoing planting effort. Rainfall this week will favor early growth of soybeans in most areas. In Argentina, a few scattered showers during the weekend and again during Tuesday will favor developing crops. However, overall this appears to be a drier than normal pattern with sometimes very warm temperatures, Meteorlogix added.
In deliveries, December soyoil deliveries totaled 2,030 lots. Issuers and stoppers were scattered among various commission houses, with the house account at ADM Investor Services a stopper of 361 lots. The last trade date assigned was November 30.
December soymeal deliveries totaled 1,378 lots. A customer account at Morgan Stanley and Co. was the primary issuer of 715 lots, with the house account at ADM Investor Services the primary stopper of 808 lots. The last trade date assigned was November 29.
Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds held net long positions totaling 179,945 combined CBOT soybean futures and options contracts as of Nov 27, up from 179,065 the prior week. Traditional large speculative traders were net long 119,937 contracts compared with net longs of 134,912 in the previous week. Commercials held net short combined futures and options positions totaling 262,839 contracts, down from the previous week's 272,512 contracts.
On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11:00 a.m. EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled mixed Monday, weighed down by Friday's losses on CBOT and worries about temporary oversupply following the arrival of a large amount of imports. The benchmark September 2008 soybean contract settled RMB18 higher at RMB4,271 a metric tonne, after trading between RMB4,245/tonne and RMB4,295/tonne.
Meanwhile, Chinese companies booked eight to 10 soybean import cargoes in the international market in the week ended Nov. 30, down from nine to 11 cargoes in the preceding week, a report by Shanghai JCI said late Friday.
Crude palm oil futures traded on Malaysia's derivatives exchange ended lower Monday on profit-taking and concerns over a possible rise in inventories, as well as the decline in crude oil futures, trade participants said. The benchmark February contract ended MYR4 lower at MYR2,926/tonne, off an intraday low of MYR2,885/tonne.
