December 8, 2008
CBOT Soy Outlook on Monday: To open higher; overnight theme
Chicago Board of Trade soybean futures are poised for a firm start to Monday's day session, buoyed by carryover strength from the overnight session and bullish outside market influences.
CBOT soybean futures are called 20 cents to 25 cents higher.
In overnight electronic trading, January soybeans ended 22 1/2 cents higher at US$8.06. January soymeal were US$5.60 higher at US$243.90 per short tonne, while December soyoil ended 76 points higher at 29.31 cents per pound.
A weaker U.S. dollar, strong gains in crude oil, precious metals and outlooks for a firm start in equity markets set the stage for a supportive opening to day session activity, analysts said.
Oversold conditions and an absence of fresh fundamental directives for the market are expected to keep outside influences featured in Monday's price action, analysts added.
However, traders are expected to maintain a cautious approach to activity in the face uncertain domestic and global economic outlooks.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at US$8.38 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$7.50 a bushel.
First resistance for January soybeans is seen at US$8.00 and then at Friday's high of US$8.11. First support is seen at Friday's contract low of US$7.76 1/4 and then at US$7.50.
The DTN Meteorlogix weather forecast said scattered to widely scattered shower activity this week will help maintain favorable conditions for recently planting crops. However, compared to Sunday the coverage of this rain appears to be less.
In Brazil, it appears likely that major corn and soybean areas will see moderate to heavy rains this week. This will help ease stress to crops, especially in the south, after recent drier and hotter weather, Meteorlogix forecasts.
Traditional large speculative traders now hold 3,632 net long positions in CBOT soybean futures and options combined contracts as of December 2, compared with net longs of 11,388 in the previous week. Index funds increased their net long positions, which now total 93,264 contracts, up from 92,978 the prior week, according to the CFTC, as reported Friday in its supplemental commitments of traders report. Commercials held net short combined futures and options positions totaling 77,068 contracts, down from the previous week's 85,297 contracts.
December soyoil deliveries totaled 228 lots. A customer account at ADM Investor Services was the primary issuer of 134 lots. The last trade date assigned was November 19.
In other news, Brazil should harvest 58.8 million metric tonnes of soybeans in the 2008-09 crop, the National Commodities Supply Corp., or Conab, said Monday. Planted area is seen between 21.2 million hectares compared to 21.3 million hectares in the 2007-08 season, Conab said.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Monday on hopes that the government will launch more stimulus plans to boost the economy. The benchmark May 2009 soybean contract settled RMB44 higher at RMB2,952 a metric tonne.