August 6, 2007
CBOT Soy Outlook on Monday: Down 13-15 cents; trims premium, midwest rains
Chicago Board of Trade soybean futures are seen starting Monday's day session on the defensive, as traders extract risk premium after beneficial weekend rains.
CBOT soybean futures are called to start the session 13 to 15 cents lower.
In overnight e-CBOT trading, August soybeans were 15 1/2 cents lower at US$8.23 1/2 per bushel, and November was 14 1/4 cents lower at US$8.46 3/4.
Weather once again will be the dominant influence on prices, with warm, wet weekend conditions in the Midwest and more of the same forecasted for early this week enticing traders to trim weather premium from prices, analysts said.
Technical selling is seen adding to the lower tone, with analysts anticipating sell stops to be activated as prices dip below moving average support.
A market technician said soybean futures gained some fresh upside technical momentum by working prices up from the July low last week. The next downside price objective for November soybeans is closing prices below solid support at the July low of US$8.34. The next upside price objective for the bulls is pushing prices above solid technical resistance at US$8.69 1/2, which would fill on the upside a downside price gap on the daily bar chart.
First resistance for November soybeans is seen at Friday's high of US$8.66 1/2 and then at US$8.69 1/2. First support is seen at Friday's low of US$8.57 and then at US$8.50.
The DTN Meteorlogix Weather Service forecast said more rain than expected occurred in the western Midwest during the weekend and more rain is in the forecast for early this week. Somewhat hotter temperatures are seen this week through the southern and eastern Midwest region.
Episodes of scattered showers and thunderstorms on tap for Monday through Wednesday will tend to favor the southern half of the western Midwest early in the period and the north later. Rainfall potential is 0.30-1.50 inches and locally heavier, with good coverage. Temperatures will average above normal with highs ranging from the upper 80s to the low 90s Fahrenheit, Meteorlogix reports.
In the eastern Midwest, scattered showers and thunderstorms are on tap through northern areas Monday through Wednesday. Rainfall potential is 0.30-1.50 inches in these areas. The southern part of the belt should see only isolated shower activity during this period. Temperatures will average above to well above normal. Highs should range from the 80s in the north to the upper 90s F south, Meteorlogix forecasts.
The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds were reported to hold net long positions totaling 154,470 combined soybean futures and options contracts as of July 31, up from 154,132 the prior week.
Traditional large speculative traders were net long 82,931 contracts compared with net longs of 93,812 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 216,310 contracts, down from the previous week's 220,782 contracts.
On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT (1500 GMT) and weekly crop progress reports at 4:00 p.m. EDT.
August soybean deliveries totaled 2,050 lots. Customer accounts at Man Professional Clearing issued 1,124 lots and stopped 895 lots. The last trade date assigned was Aug. 3.
In overseas markets, crude palm oil futures in Malaysia's derivatives exchange tumbled amid thin trading Monday, dragged down by falls in equity markets and losses in other commodities such as crude oil. The benchmark October CPO futures contract on Bursa Malaysia Derivatives ended at MYR2,480 a metric tonne, down MYR102 from Friday.
Soybean futures traded on the Dalian Commodity Exchange settled higher Monday as demand for soyoil and soymeal picked up. The benchmark January 2008 soybean contract settled RMB1 higher at RMB3,435 a metric tonne.
