July 21, 2008

 

CBOT Soy Outlook on Monday: Down 7-10 cents, follow through sales, weather

 

 

Chicago Board of Trade soybean futures are seen starting Monday's day session on the defensive, following through on Friday's weakness amid favorable weather for crop development.

 

CBOT soybean futures are called 7 to 10 cents lower.

 

In overnight electronic trading, August soybeans were 8 1/2 cents lower at US$14.61 1/2 and November soybeans were 7 1/2 cents lower at US$14.40 1/2. December soyoil was 60 points lower at 62.90 cents per pound and December soymeal was US$2.00 lower at US$374.80 per short tonne.

 

Weather looks good for developing soybean crops near term, and with crop conditions seen on the rise and technical weakness from the previous week, soy futures have the recipe for early declines, a CBOT floor analyst said.

 

The DTN Meteorlogix Weather forecasts said generally favorable weather will continue for developing corn and soybeans with no signs of any significant hot, dry weather or persistent heavy rains.

 

A lack of fresh supportive news and underlying pressure from the expected return of Argentine exports amid the cancelation of an export tax that disrupted shipments from Argentina since March will help divorce soybeans from firm outside inflationary markets, analysts said. Weakness in Asian soy and vegoil markets are expected lend some pressure to prices as well, analysts added.

 

A technical analyst said market bears have gained fresh downside near-term technical momentum and near-term chart damage has been inflicted. The next upside price objective for November soybeans is to push and close prices above psychological resistance at US$15.00 a bushel. The next downside price objective is pushing and closing prices below psychological support at US$14.00.

 

First resistance for November soybeans is seen at US$14.50 and then at US$14.75. First support is seen at US$14.30 and then at US$14.15.

 

Meanwhile, U.S. Department of Agriculture said Monday, U.S. private exporters sold 290,000 metric tonnes of soybeans for delivery to China in the 2008-09 marketing year.

 

Index funds trimmed their net long CBOT soybean futures and options positions combined, which now totals 160,284 contracts as of July 15, down from 165,205 the prior week, according to the CFTC, as reported Friday in its supplemental commitment of traders report. Traditional large speculative traders were net long 81,026 contracts compared with net longs of 81,784 in the previous week. Commercials held net short combined futures and options positions totaling 214,971 contracts, down from the previous week's 221,604 contracts.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply lower Monday, after Chicago Board of Trade soybean futures tumbled Friday amid ideal weather conditions in the U.S. and the end of strikes in Argentina, said analysts. The benchmark January 2009 soybean contract settled around 3.6% lower at RMB4,687 a metric tonne after trading between RMB4,640 and RMB4,753/tonne.

 

Crude palm oil futures on Malaysia's derivatives exchange ended 3.9% lower Monday, hitting their lowest levels in more than 15 weeks on heavy speculative selling - later recovering on supportive export numbers. The benchmark October contract on the Bursa Malaysia Derivatives ended MYR132 lower at MYR3,260 a metric tonne.