March 23, 2009
CBOT Soy Outlook on Monday: Seen up on outside markets, argentine strike
The combination of outside financial market support and the potential for increased export demand amid lingering farmer tension in Argentina have Chicago Board of Trade soybean futures poised for a strong start Monday.
CBOT soybean futures are called 25 cents to 30 cents higher.
In overnight electronic trading, May soybeans were 29 cents higher at US$9.81. May soymeal was US$8.20 higher at US$308.70 per short tonne, while May soyoil ended 96 points higher at 33.21 cents per pound.
The dollar is weaker, equities are on fire in early action, crude oil is up coupled with the Argentina farmers strike are laying the ground work for futures to extend the overnight theme, said Vic Lespinasse, analyst with Grainsanalyst.com.
Optimism about a U.S. government bailout plan for the banking industry is energizing the stock market early on and the Argentina farmer's strike has the potential to keep world importers looking to source supplies from the U.S., analysts said.
Relations between the agricultural sector and the Argentine government took a sharp turn for the worse Friday as farmers launched a one week strike to protest export taxes on grains. The new strike comes as protesting farmers manned dozens of roadblocks across key highways in a move reminiscent of the crippling blockades thrown up in 2008.
Inflationary fears and technical strength are added features expected to attract fund buying as well.
A technical analyst said market bulls have gained good near-term upside technical momentum recently. The next upside price objective for May soybeans is to push and close prices back above solid technical resistance at US$9.80 a bushel. The next downside price objective is pushing and closing prices below solid technical support at US$9.00 a bushel.
First resistance for May soybeans is seen at US$9.60 and then at US$9.70. First support is seen at Friday's low of US$9.35 1/4 and then at US$9.25.
Large speculative traders now hold 970 net short positions in CBOT soybean futures and options combined contracts as of March 17, compared with net shorts of 6,696 in the previous week, according to the Commodity Futures Trading Commission in its supplemental commitments of traders report.
Index funds increased their net long positions in CBOT soybean futures and options. The combined number rose to 102,617 contracts from 96,129 the prior week, according to CFTC in its supplemental commitments of traders report released Friday. Commercials held net short combined futures and options positions totaling 78,988 contracts, up from the previous week's 65,669 contracts, as reported in the CFTC supplemental report.
On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m., EDT.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Monday. Meanwhile, China's soybean imports in February surged 61% on year to 3.26 million metric tonnes, the General Administration of Customs said Monday.
