May 8, 2007

 

CBOT Soy Outlook on Tuesday: Down 5-7 cents on crop progress, corn spillover

 

 

Chicago Board of Trade soybean futures are expected to start daytime trading 5-to-7 cents lower Tuesday on spillover from an expected lower start in corn futures, a floor analyst said.

 

In overnight e-CBOT trading, May soybeans fell 7 cents to US$7.22 per bushel, July declined 4 1/4 cents to US$7.38 1/4 and November fell 5 cents to US$7.67 1/4. e-CBOT volume in July was 3,014 contracts.

 

There is "no fear about planting progress delays" any more and the market should reflect that Tuesday, a floor analyst said.

 

Soybean plantings are a bit behind last year's pace but the rapid increase in corn plantings reported should limt talk of switching from corn into soybeans. However the rapid seeding of corn acres is likely to keep corn under pressure and that is expected to weigh on soybeans as well, the analyst said.

 

The U.S. Department of Agriculture reported Monday that 10% of the U.S. soybean crop was planted as of May 6, near the high end of analysts' estimates but below the five-year average of 17%.

 

In the western U.S. Midwest mainly dry weather is forecast Wednesday and Thursday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

In the eastern U.S. Midwest, there is a chance for light showers with locally heavier amounts on Wednesday and Thursday with temperatures averaging above normal in the period, Meteorologix Weather said.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal with rainfall near-to-above normal northwest and near-to-below in the rest of the region.

 

On day session open auction technical charts, July soybeans closed lower with a 2 1/2 month-old downtrend line still in place in the daily bar chart, a technical analyst said. Fresh upside momentum would be regained by producing a close above last week's high of US$7.58 1/2.

 

First resistance for July is seen at US$7.50 and then at US$7.55, with first support at US$7.38 1/2 and then at US$7.34.

 

Deliveries posted against the May future were 1,144 contracts. Large issuers included the customer account of Man Professional Clearing which issued 574 contracts and the customer account of Kottke which issued 157 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 498 contracts, and the customer account of the Combs division of Cunningham, which stopped 224 contracts. The last trade assigned was May 7.

 

In overseas markets, palm oil futures settled mostly lower on profit taking with benchmark July down MYR7 at MYR2,238 per metric tonne.

 

Soybean futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark September contract down RMB4 at RMB3,114 per metric tonne.