Quiet Start to Weekly Trade

CHICAGO - Nov 12/07 - SNS -- International agriculture commodity markets opened the week's trading on a somewhat quiet note, with little fresh business reported, though India has announced one of what should be three wheat import tenders.

Friday's Commitments of Traders (COT) report with options shows that small specs are still heavily short by 110,116 contracts, note Chicago Board of Trade (CBOT) analysts. Trend-following funds are net long by 159,024 contracts.

"This leaves the market vulnerable to new fund buying and small spec short-covering if resistance is violated. Funds increased their net long by 33,297 contracts in just one week and the buying trend is supportive," CBOT analysts said.

For wheat, the latest COT report reveals non-reportable traders (small specs) are net short 35,114 contracts from last week. The supplemental report which excludes index funds showed that trend-following funds are also substantially short by nearly 15,847 contracts. "This factor should be supportive from lower levels," added CBOT analysts.

In the case of soybeans, Friday's COT report showed the market in a bullish set-up but in an extremely overbought condition.

CBOT analysts said, "The report showed a record high net long position for 1) Non-commercial traders in soybeans at 144,009, 2) the combined net long in soybeans from speculators and 3) the non-commercial (fund) net long position in meal. Funds also increased their net long position in oil to 63,985 contracts, which leaves the non-commercial net long 279,782 contracts when combining soybeans, meal and oil."

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