December 14, 2009

 

CBOT Soy Outlook on Monday: Seen lower; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are expected to begin Monday's day session lower, in tune with the overnight theme.

 

CBOT soybean futures are seen starting 2 cents to 4 cents lower. In overnight trade, January soybeans were 3 cents lower at US$10.32, and March soybeans were 2 3/4 cents lower at US$10.40 1/4.

 

The market is poised to drift lower, garnering pressure from improved crop conditions in South America and reports China will release soybeans and vegoil reserves in an effort to cap rising domestic prices, said Don Roose, president of U.S. Commodities.

 

The news that China will release reserves gave a little caution to the market overnight, Roose said.

 

Technical factors are seen playing a key role in price direction also, amid the absence of fresh fundamental news and mixed signals from outside markets. The U.S. dollar index and crude oil futures are lower while metal futures are higher in early trade.

However, a higher-than-expected November soybean crush is seen providing support to limit downside risks, analysts said.

 

A technical analyst said first resistance for January soybeans is seen at Friday's high of US$10.41 1/4 and then at US$10.50. First support is seen at US$10.25 and then at last week's low of US$10.19.

 

The National Oilseed Processors Association said 160.3 million bushels of soybeans were crushed in November. That's up from 155.3 million in October and above the average analyst estimate of 153.4 million. The daily crush rate was higher in November than October, reflective of the strong export program for soy products, said Mario Balletto, analyst with Citigroup in Chicago. Soyoil stocks were pegged at 2.411 billion pounds, up from 2.286 billion in October and above the average analyst estimate of 2.349 billion. A high level of crushing activity served as the catalyst for the buildup of soyoil stocks, analysts said.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Monday, tracking concerns over the government's readiness to sell oilseeds to curb a rise in vegetable oil prices. The benchmark September 2010 soybean contract settled RMB40 lower at RMB3,969 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday, with investors taking cues from a broad-based selloff in commodities and likely lower palm oil export figures, trade participants said. The February contract on BMD ended 0.7% lower at MYR2,513 a metric tonne.