November 10, 2008
CBOT Soy Outlook on Monday: Up 20-30 cents, outside markets trump USDA report
Bullish outside market influences are seen propelling Chicago Board of Trade soybean futures in early action Monday, overshadowing U.S. Department of Agriculture production and supply/demand reports.
CBOT soybean futures are called 20 to 30 cents higher.
"Outside markets will remain the dominant feature, neutralizing a USDA report that was neutral to slightly negative," said Don Roose, president U.S. Commodities in West Des Moines Iowa.
The report wasn't enough to make a difference for the market, and prices should continue to linger inside their recent trading ranges, Roose added.
A weaker U.S. dollar and near US$4.00 gains in crude oil futures are pointing to a higher start. Supportive underlying fundamentals remain buoying features, with strong export demand expected to keep a floor beneath prices.
A technical analyst said the next upside price objective for January soybeans is to push and close prices above solid technical resistance at last week's high of US$9.81 3/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the October low of US$8.38 1/2.
First resistance for January soybeans is seen at Friday's high of US$9.26 and then at US$9.55 1/2. First support is seen at US$9.00 and then at last week's low of US$8.82 1/2.
USDA reported 2008-09 soybean production at 2.921 billion bushels, down 17 million from the October estimate of 2.938 billion based on a lower yield estimate, but above the average of analysts' estimates for a crop size of 2.916 billion bushels. The 2008-09 U.S. soybean yield was estimated at 39.3 bushels per acre, down from the October estimate of 39.5.
The USDA forecast 2008-09 U.S. soybean ending stocks at 205 million bushels, unchanged from last month, and above the average analyst estimate of 189 million. Soybean crush is reduced 15 million to 1.745 billion bushels due to lower values for soybean oil and soybean meal.
USDA is scheduled to release its weekly export inspections report Monday at 11 a.m. EST and its weekly crop progress report at 4 p.m. EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled sharply higher Monday, boosted by the Chinese government's 4 trillion yuan economic stimulus plan. The benchmark May 2009 soybean contract settled RMB85 higher at RMB3,349/tonne.
Crude palm oil futures on Malaysia's derivatives exchange rose as much as 5.4% Monday on fresh buying as investors took cues from a rebound in soyoil and favorable price forecasts from analysts. The benchmark January contract on Bursa Malaysia Derivatives ended 17 ringgit higher at MYR1,626 a metric tonne after reaching an intraday high of MYR1,696.