December 4, 2006

 

CBOT Soy Outlook on Monday: Seen down 5-7 cents; lower overnight indicators

 

 

Soybean futures on the Chicago Board of Trade soybean futures are expected to start Monday's day session on weak footing, as lower overnight indicators shape early activity in the absence of fresh market moving news.

 

Soybean futures are called to open 5 to 7 cents lower.

 

In e-CBOT trade, January soybeans were 6 1/2 cents lower at US$6.70 1/2 and March was 7 1/2 cents lower at US$6.84 1/2 per bushel.

 

Carryover selling from overnight trade is seen leading prices lower, as the trade continues to consolidate positions amid the lack of fresh inputs to feed bullish appetites, analysts said.

 

Spillover pressure from anticipated lower openings in neighboring grain futures, declines in outside markets and favorable crop conditions in South America take some edge off prices, analysts add.

 

Meanwhile, traders say the modest correction is not expected to result in deep losses, as speculative buyers continue to emerge on price breaks.

 

A technical analyst said despite Friday's declines market bulls are still in technical command. The next upside price objective is to close January futures above major psychological resistance at US$7.00 a bushel. The next downside price objective is closing prices below solid support at US$6.60.

 

First resistance for January soybeans is seen at Friday's high of US$6.85 and then at US$6.89. First support is seen at US$6.75 and then at US$6.70.

 

Commodity Futures Trading Commission on Friday reported large speculative traders were net long 47,996 combined soybean futures and options contracts as of Nov. 28, compared with net longs of 37,577 in the previous week. Speculative funds were reported net long soyoil futures and options to the tune of 65,816 lots, compared with net longs of 70,377 lots in the prior week. Large speculative traders were reported net long combined futures and options positions in soymeal by 30,186 lots, compared with net longs of 33,136 contracts last week.

 

In deliveries, a total of 2,485 delivery notices were posted against the December soyoil future. Issuers and stoppers were widely scattered among various commission houses. The last trade date assigned was Dec. 1. Soymeal delivery notices totaled 761 lots. Issuers and stoppers were widely scattered. The last trade date assigned was Nov. 30.

 

On tap for Monday, USDA is scheduled to release its weekly export inspection report 10:00 a.m. CST.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday, according to cash sources Monday.

 

Rotterdam soybeans and soymeal was mostly lower. European vegoils were mixed.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled down Monday, pressured by Friday's losses in CBOT soybean futures, analysts said. The benchmark May 2007 contract settled RMB37 lower at RMB2,854 a metric tonne, after trading between RMB2,843/tonne and RMB2,865/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Monday as the market remained under pressure from falling soyoil prices, the strengthening ringgit and weak technical indicators, analysts said. The benchmark February contract ended down MYR25 at MYR1,863 a metric tonne.