December 12, 2005

  

CBOT Soy Outlook on Monday: Up 7-10 cents, e-CBOT, outside market influence

 

 

Soybean futures on the Chicago Board of Trade are seen starting Monday's open auction session with strong gains, following the overnight theme, as carryover momentum from Friday, the influence of outside inflationary markets, and dry conditions in northern Argentina provide legs for the market, traders said.

 

Analysts call soybeans to open 7 to 10 cents per bushel higher.

 

In overnight electronic trade, January soybeans were 10 1/2 cents higher at US$5.79 1/4, January soymeal was US$2.60 higher at US$183.50 and January soyoil was 38 points higher at 21.25 cents per pound.

 

Follow through buying from the market's ability to respond positively to a negative crop report on Friday, concerns over dryness in northern Argentina and the need to push prices higher to pull supplies out of farmer hands should give futures a boost in early trade, said Don Roose, president U.S. Commodities in West Des Moines. Iowa.

 

Traders anticipate speculative buying will emerge on the higher open, with commodity funds holding net short positions in the market. The influence of higher inflationary markets, as energy and metals markets surge coupled with a weaker U.S. dollar versus other major currencies is seen adding support to prices as well.

 

Feelings that U.S. soybean exports to China will rebound as bird flu fears in that nation wane is an underlying feature aiding the supportive tone, added Roose.

 

Meanwhile, the DTN Meteorlogix Weather Service said mostly dry conditions were reported across Argentine growing areas during the weekend. Mainly dry weather is forecast through the week, with temperatures averaging near to above normal.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net short futures and options positions totaling 31,132 lots in soybeans, 25,914 contracts in soyoil and 11,057 lots in soymeal as of Dec. 6.

 

A total of 135 delivery notices were redelivered against the December soyoil contract, with issuers and stoppers scattered among various firms. The last date assigned was Dec. 9.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled sharply higher as speculative long buying emerged after Chicago Board of Trade soybeans rose Friday and continued to surge in overnight electronic trading. The benchmark May 2006 soybean contract rose RMB47 to settle at RMB2,630 a metric tonne, after trading between RMB2,595 and RMB2,648/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally higher after another slow, range bound trading day Monday ahead of the release of a key supply and demand report. The benchmark February contract ended at MYR1,415 a metric tonne, up MYR4 from Friday.

 

Rotterdam soybeans and soymeal prices were higher, and European vegoils were mixed.