December 21, 2009

 

CBOT Soy Outlook on Monday: Up 3-5 cents; recovery bounce from last week

 

 

Chicago Board of Trade soybean futures are poised for a firmer start to Monday's day session, following the overnight theme, as the market stages a modest recovery from last week's declines.

 

CBOT soybean futures are seen starting 3 to 5 cents higher. In overnight trade, January soybeans were 5 cents higher at US$10.17, and March soybeans were 4 3/4 cents higher at US$10.24 3/4.

 

The market is set to begin the holiday shortened trading week on firm footing, garnering support from traders evening positions ahead of the holidays, analysts said.

 

A quiet news front will add to the subdued theme, with choppy, two-sided action possible as traders take a cautious approach heading into the end of the year.

 

Underpinning support is seen from outside markets, where weakness in the U.S. dollar index and strength in crude oil and metal futures lend psychological strength to prices, analysts said.

 

However, favorable South American crop conditions are expected to cap upside potential, opening the door for selling pressure to emerge.

 

Otherwise, light activity is anticipated, with the absence of any government reports adding to the subdued tone.

 

A technical analyst said first resistance for March soybeans is seen at US$10.30 and then at Friday's high of US$10.40 1/4. First support is seen at Friday's low of US$10.16 1/4 and then at US$10.00.

 

The DTN Meteorlogix weather forecast said a weak ridge that developed over southern Brazil late last week should weaken and move off by the end of this week, leaving no significant concerns for crops at this time.

 

In Argentina, heavy rains hit many areas during the weekend. While this will mostly provide adequate to surplus moisture for crops it also likely means some serious flooding in some locations, Meteorlogix said.

 

The U.S. Department of Agriculture, along with other federal agencies, will be closed Monday because of the storm, which dumped heavy snow on the nation's capital. As a result, the weekly export inspections report, normally released on Mondays, will be delayed until Tuesday at 11 a.m. EST, the agency said in a statement.

 

CBOT markets will have a holiday shortened trading week, with markets closing at 1 p.m. EST Thursday, and remaining closed Friday in observance of the Christmas Day holiday.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled slightly lower Monday, with traders cautious as they weighed conflicting signals. The September 2010 soybean contract settled 0.2% lower at RMB3,945 a metric tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday, due to weaker exports and a downward price correction, said trade participants. The benchmark March contract on the Bursa Malaysia Derivatives ended MYR65 lower at MYR2,555 a metric tonne.