December 24, 2007

 

CBOT Soy Outlook on Monday: 1/2-1 cent lower; light, two-sided trade expected

 

 

Chicago Board of Trade soybean futures are predicted to start trading 1/2-to-1 cent lower Monday, following the tone established in overnight trade, though activity is expected to be thin with the Chicago Board of Trade closing early ahead of the Christmas holiday and some participants expected to be absent, analysts said.

 

The CBOT will close at 1 p.m. EST Monday and will be closed Tuesday for Christmas.

 

In overnight e-CBOT trading, January ended 3/4 cent lower to US$11.76 3/4 per bushel and March slipped 1/4 cent to US$11.95 3/4. E-CBOT volume in March was 4,971 contracts.

 

"It will probably not be a very interesting day," a trader said. It's an abbreviated session and participation is expected to be quiet. The dollar is a little lower which is a touch supportive, but overall activity should be thin ahead of the holiday, the trader said.

 

Soybeans rallied to another new contract and 34-year high Friday and there could be some light profit taking ahead of the holiday, a commission house analyst said. People aren't expected to establish and keep new positions over the holiday, which will likely limit any strong trading interest, the analyst said.

 

Episodes of shower activity and warm temperatures are expected to favor the developing soybean crop is Brazil during the next week-to-10 days, DTN Meteorlogix Weather said. Scattered showers with amounts of 0.10-0.75 inch are expected from Rio Grande del Sol to Parana on Monday through Wednesday, with scattered showers and thunderstorms forecast Thursday through Saturday. Temperatures are expected to average near-to-above normal in the period, Meteorlogix Weather said.

 

On daily technical charts, March soybeans closed higher, hit another fresh contract high and reached a new 34-year high on daily technical charts, a technical analyst said. There are still no solid technical clues that a market top is at hand and market bulls appear poised to challenge the all-time high of US$12.90 per bushel set in 1973, the analyst said.

 

The next major upside price objective is to push and close prices above US$12.00 per bushel, while the next downside price objective is closing prices below technical support at US$11.63, last week's low. First resistance is seen at the contract high of US$11.96 1/2 and then at US$12.00. First support is seen at US$11.86 1/2, and then at US$11.75.

 

In overseas markets, crude palm oil futures settled near record high, supported by the U.S. energy bill that could create big long-term demand for palm oil, market participants said. The benchmark March contract on the Bursa Malaysia Derivative Exchange ended up MYR38 at MYR3,030/tonne.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds held net long positions totaling 183,636 combined CBOT soybean futures and options contracts as of Dec. 18, down from 183,645 the prior week. Traditional large speculative traders were net long 125,764 contracts compared with net longs of 137,780 in the previous week. Commercials held net short combined futures and options positions totaling 274,943 contracts, down from the previous week's 283,824 contracts.

 

In other soybean news, soybean futures on China's Dalian Commodities Exchange settled higher following the gains set Friday in CBOT futures. The benchmark September 2008 contract jumped RMB40 higher to RMB4,509 per metric tonne.

 

The weekly export inspections report won't be released Monday with the U.S. Department of Agriculture closed ahead of the holiday.