November 17, 2008
CBOT Soy Outlook on Monday: Down 4-6 cents on outside market influence
The influence of outside market forces are expected to pressure Chicago Board of Trade soybean futures in early action Monday.
CBOT soybean futures are called 4 cents to 6 cents lower.
In overnight electronic trading, January soybeans dropped 4 1/4 cents to US$8.91 3/4. January soymeal futures were US$0.60 higher at US$267.40 per short tonne, while December soyoil shed 45 points to 32.52 cents per pound.
Weakness in crude oil, early forecasts of a lower start in equity markets and a firmer U.S. dollar are being considered bearish influences on early price action, said Vic Lespinasse, analyst with Grainsanalyst.com.
However, the outside markets are not making strong definitive moves so far, and price action could easily be pushed in either direction, he added.
A quiet news front with the absence of fresh demand news, and U.S. harvesting being wrapped up are keeping traders' sites on economic factors.
Nevertheless, prices remain in a multi-week sideways trend, providing some confidence that a near-term low has been established, traders said.
A technical analyst said the next upside price objective for the bean bulls is to push and close prices above solid technical resistance at last week's high of US$9.54 1/4 a bushel. The next downside price objective for the bears 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 expected to be at US$9.00 and then at Friday's high of US$9.10. First support is seen at Friday's low of US$8.78 and then at last week's low of US$8.72 3/4.
Traditional large speculative traders now hold 9,030 net long positions in CBOT soybean futures and options combined contracts as of Nov. 11, compared with net longs of 17,682 in the previous week. Index funds trimmed their net long positions, which now total 102,218 contracts, down from 103,239 the prior week, according to the CFTC, as reported Friday in its supplemental commitments of traders report. Commercials held net short combined futures and options positions totaling 90,838 contracts, down from the previous week's 103,170 contracts.
The U.S. Department of Agriculture 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 other news, China's October soyoil imports fell sharply versus a year ago, but the decline was milder than in September because the government took advantage of lower prices to buy for state reserves, analysts said Monday. China's October soyoil imports dropped 28% from the same month a year earlier to 200,000 metric tonnes, according to preliminary data issued Monday by the General Administration of Customs.
In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled slightly lower Monday, pressured by the strengthening dollar and along with weakening cash soybean prices. The benchmark May 2009 soybean contract settled RMB5 lower at RMB3,231 an metric tonne, down 0.2%.
Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday despite a recovery in exports on selling pressure due to spillover weakness from crude oil. The new benchmark third-month February contract on Bursa Malaysia Derivatives ended MYR25 lower at MYR1,435 a metric tonne.