December 22, 2008


CBOT Soy Outlook on Monday: Pre-holiday boost seen, dollar supportive



Soybean futures on the Chicago Board of Trade are expected to open higher Monday, with support from higher crude oil and a weaker U.S. dollar.


CBOT soybean futures are called 15-17 cents higher.


In overnight electronic trading, January soybeans rose 15 cents to US$8.83 1/4 per bushel. The March contract added 15 3/4 cents to US$8.82 1/4. January soymeal gained US$3.20 to US$270.70 per short tonne, and December soyoil increased 58 points to 31.18 cents per pound.


Soybean prices held relatively well to close out the past week, considering the renewed focus on acreage shifting from corn to soybeans in 2009, said Arlan Suderman, Farm Futures market analyst. "Near-term export demand remains strong, with China actively buying...U.S. soybeans. Dryness in Argentina and Brazil adds support as well, with production threats offsetting concerns over too many U.S. acres in the coming growing season."


"Even so, soybeans can't seem to establish enough upward momentum to sustain a move above critical chart resistance at US$9," he said. "That's not likely to happen during the holiday trade period either without an increase in production concerns in the Southern Hemisphere."


Bulls are aiming to pierce psychological resistance at US$9 a bushel on the CBOT March contract, a market technician said. He marked first resistance at Friday's high of US$8.73 3/4, then at last week's high of US$8.82.


Bears retain near-term technical advantage and aim to close March soybeans below psychological support at US$8 a bushel, the technician said, pegging Friday's low of US$8.64 1/2 as first support and then US$8.50.


In global trading news, China's soybean imports in November fell 1.1% on the year to 3.32 million metric tonnes, the General Administration of Customs said Monday.


In the January-November period, soybean imports rose 22% to 34.14 million tonnes.


Crude palm oil futures on Malaysia's derivatives exchange rose as much as 3.9% on Monday on fresh buying as investors took leads from strong exports, purchases by India and a rebound in soyoil prices.


The benchmark March contract on Bursa Malaysia Derivatives ended MYR52 higher at MYR1,588 a metric tonne, close to the intraday high of MYR1,596.


In Brazil, "more rain is needed for planting and developing soybeans through Rio Grande do Sul and Parana, [while] rain favors the developing crop across northern Mato Grosso," said DTN Meteorolgix.


Brazilian farmers have planted 97% of the new 2008-09 soybean crop as of Dec. 18, consulting firm AgRural said Friday.


AgRural said this is slightly below 98% at the same time in 2007 but above 92% on Dec. 11.


Meanwhile, in Argentina, "more rain is needed for developing soybeans," the forecasters add.

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