March 31, 2009

 

CBOT Soy Outlook on Tuesday: Higher on bullish USDA plantings, stocks

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session higher, supported by lower than-expected prospective planted acres and March 1 quarterly grain stocks data from U.S. Department of Agriculture.

 

CBOT soybean futures are called 15 cents to 25 cents higher.

 

The USDA data is expected to generate a bullish market perception, with support from outside markets providing supportive influences as well, analysts said.

 

The USDA estimated U.S. 2009-10 soybean planted acreage at 76.024 million acres, below the average analyst estimate of 79.251 million, as well as near the low end of trade estimates at 75.900 million. U.S. soybean planted acreage was 75.718 million in 2008. Despite acres falling below expectations, the 76 million acres of soybeans farmers say they intend to sow in 2009, would be a record for planted area, the USDA said in Tuesday's prospective plantings report. The USDA says eight states will see acreage increases of 100,000 acres or more, including top-producer Iowa, Kansas, North Dakota and Mississippi.

 

"If realized, the planted acreage in Kansas will be the largest on record, and the planted acreage in North Dakota will tie the previous record high," the USDA says. "We did increase soybean acres to a record high amount, but certainly not to the number that everybody thought coming into this report," said Brian Hoops, president Midwest Market Solutions.

 

"Where did these soybean acres go? You have wheat acres down sharply; and you have corn acres down compared to last year," Hoops added.

 

Soybean stocks as of March 1 were 1.302 billion bushels, lower-than-the average estimate of 1.322 billion bushels and near the lower end of trade estimates from a Dow Jones Newswires survey at 1.295 billion. U.S. soybean stocks totaled 1.434 billion on March 1, 2008. Indicated disappearance for the December 2008 - February 2009 quarter totaled 976 million bushels.

 

"The stocks numbers brings the issue of tight old crop supplies back into play, with the market watching bull spreads, said Mike Zuzolo, analyst with Risk Management Commodities in Lafayette, Ind.

 

The USDA data will take center stage in early action, but outside factors will remain a focal point, with early price strength in stock indexes, crude oil and a lower U.S. dollar index seen aiding the firm tone, a CBOT floor analyst added.

 

Soy product futures are seen higher, in step with soybeans.

 

Meanwhile, Argentina's Agriculture Secretariat confirmed Monday what the farm sector had long feared. The 2008-09 Argentina soy crop, the backbone of farmers' income, looks to be the worst outcome in four years due to a brutal drought, rising input costs and a lingering conflict with the government over export taxes.

 

The secretariat pegged this year's Argentina soy crop at 37 to 39 million metric tonnes, down sharply from the initial expectations of about 50 million tonnes, and well under the current USDA forecast of 43 million tonnes.