December 28, 2009

 

CBOT Soy Outlook on Monday: Up on short-covering, outside support

 

 

Chicago Board of Trade soybean futures are expected to climb on Monday's open on short-covering, solid demand and modest outside market support.

 

Soybeans are called 8 to 12 cents higher. In overnight trading, January soybeans were up 12 1/4 cents to US$10.11 3/4 per bushel and March soybeans were up 12 cents to US$10.20.

 

March soymeal was up US$3.90 to US$300.20 per short tonne and March soyoil was up 32 points to 39.18 cents per pound.

 

The market is expected to bounce following last week's slide, in which the January contract lost 12 1/2 cents.

 

"I think what you have is a market trying to correct itself," an analyst said.

 

A weaker dollar gave prices some support overnight and could continue to on Monday, traders said. Analysts also note solid export demand, demonstrated by higher-than-expected weekly net U.S. export sales reported Thursday.

 

But with the market looking at prospects for the South American crop, the outlook there remains bearish. Country Hedging noted "scattered rains" across Brazil and Argentina over the three-day Christmas holiday weekend.

 

Volume is expected to remain light this week, which will be shortened due to the New Year's Day holiday on Friday.

 

The next upside technical objective for the bulls is pushing and closing March prices above solid technical resistance at US$10.40 a bushel. The next downside price objective for the bears is pushing and closing prices below solid technical support at last week's low of US$9.92 1/4.

 

First resistance for March soybeans is seen at Thursday's high of US$10.17 and then at last week's high of US$10.27 3/4. First support is seen at US$10.00 and then at last week's low of US$9.92 1/4.

 

In other markets, soybean futures rose on the Dalian Commodity Exchange Monday, tracking gains on the Chicago Board of Trade and amid confidence in the continuation of Chinese policies supporting macroeconomic growth.

 

The benchmark September 2010 soybean contract settled RMB34 or 0.9% higher at RMB3,996 a metric tonne.

 

Also crude palm oil futures on Malaysia's derivatives exchange ended higher Monday as lower production helped negate falling exports, said trade participants.

 

The benchmark March contract on the Bursa Malaysia Derivatives ended MYR38 higher at MYR2,592 a metric tonne, after trading in a range of MYR2,574-MYR2,605/tonne.