CBOT Soy Outlook on Monday: Up 30-35 cents; bounce on outside market stability
CBOT soybean futures are called 30-to-35 cents higher.
In overnight electronic trading, November soybeans were 34 1/2 cents higher at US$9.28 1/2. December soyoil was 126 points lower at 36.76 cents per pound and December soymeal was US$10.60 higher at US$268.80 per short tonne.
Signs of stability in outside equity and energy markets are lending strength to prices while providing confidence to buyers that a near term bottom maybe in place, analysts said.
News of China buying soybeans to build local reserves is seen aiding the higher tone, with underlying support expected from technical buying as the market attempts to consolidate from oversold conditions.
Nevertheless, traders will keep a close eye on outside financial markets, as uncertainty over the state of the global economy continues to paint a cloudy picture for the market, a CBOT floor analyst said.
A market technician said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at last week's high of US$9.72 1/2 a bushel. The next downside price objective is pushing and closing prices below solid technical support at last week's low of US$8.38 1/2.
First resistance for January soybeans is seen at Friday's high of US$9.21 1/4 and then at US$9.40. First support is seen at US$9.00 and then at Friday's low of US$8.88 3/4.
The DTN Meteorlogix weather forecast said the western Midwest will get into the rain and cool conditions sooner than the east. The east may get some field work down prior to the rains. The long range outlook suggest drier conditions but possibly some fairly cool to cold weather later in the 10 day period.
Meanwhile, traditional large speculative traders reduced their net long positions in CBOT soybean futures and options combined contracts, which now total 5,908 contracts as of Oct. 14, compared with net longs of 15,874 in the previous week. Index funds trimmed their net long positions, which now total 110,440 contracts, down from 115,819 the prior week, according to the Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Commercials held net short combined futures and options positions totaling 82,887 contracts, down from the previous week's 94,397 contracts.
U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday 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 higher Monday on news of the Chinese government's purchase plan of buying soybeans from a major producing region in the northeast at RMB3,700 a metric tonne for the state reserves. The benchmark January 2009 soybean contract settled RMB153 higher at RMB3,330/tonne.
Crude palm oil futures on Malaysia's derivatives exchange rose as much as 4.8% Monday on short-covering but ended off highs as exports hit a nine-month low, said trade participants. The benchmark January contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR1,677/tonne, off an intraday high of MYR1,727/tonne.