May 12, 2009

 

CBOT Soy Outlook on Tuesday: Up 10-15 cents; outsides trump neutral USDA report

 

 

Chicago Board of Trade soybean futures are expected to start Tuesday's day session higher, feeding off support from outside markets and technical momentum.

 

"The outsides should influence prices, as U.S. Department of Agriculture's supply and demand report failed to pack any surprises for the market," a CBOT floor trader said.

 

The USDA estimated U.S. 2008-09 soybean ending stocks at 130 million bushels, down 35 million from the 165 million estimated in April. The USDA raised its export estimate by 30 million bushels and the crush by five million to account for the change.

 

"The soybean story has been pretty well known for quite awhile ... the trade had the carryover numbers right essentially," said Rich Balvanz of AMS Commodities in Marion, Iowa.

 

The USDA revised its production estimate for Argentina, trimming its estimate by five million tonnes to 34 million. Brazil's output was left unchanged while China's production was lowered 800,000 tonnes to 16.8 million metric tonnes.

 

"The report is a yawner for soybeans, not providing anything the market has not been trading for the past couple of weeks, but traders anticipate supportive outside market influences will underpin prices," a CBOT floor analyst said.

 

A technical analyst said the next upside price objective for July soybeans is to push and close prices above solid technical resistance at US$11.50 a bushel. The next downside price objective is pushing and closing prices below solid support at US$10.50 a bushel.

 

Meanwhile, soybean planting was 14% complete, up from 11% last year but down from the average of 25%, according to the USDA on Monday. Analysts had estimated planting would be 14% to 22% complete. Western Midwest states made more progress getting soybeans in the ground than eastern states. Iowa's crop was 21% planted, up from 3% last year and down from the average of 26%, the USDA said. In Indiana, soy planting was 2% complete, down from 17% last year and the average of 31%. In Illinois, no soybeans were planted yet, compared to 6% last year and the average of 28%.

 

In other news, China imported 3.71 million metric tonnes of soybeans in April, up 55.2% on year, according to preliminary data issued Tuesday by the General Administration of Customs. China imported 13.86 million tonnes of soybeans in the January-April period, up 36% on year, Customs said.

 

In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, along with a rebound in soymeal prices as market participants digested news of the confirmation of China's first case of flu caused by the A/H1N1 virus. Crude palm oil futures on Malaysia's derivatives exchange ended Tuesday at a new high for 2009 on news Indonesia may increase its CPO export tax to 2.5% in June, versus a nil tax in May, said trade participants.