August 14, 2007

 

CBOT Soy Outlook on Tuesday: Down 1-2 cents; following overnight e-CBOT theme

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session slightly lower, in step with overnight trade amid a lack of fresh supportive news.

 

CBOT soybean futures are called to start the session 1 to 2 cents lower.

 

In overnight e-CBOT trading, November soybeans were 2 1/2 cents lower at US$8.79 1/4.

 

The market is expected to stabilize after Monday's gains, with unchanged crop ratings and rains moving through parts of the central U.S. crop belt applying mild pressure to prices, analysts said.

 

However, lingering worries over dryness in southern Midwest and Delta states is expected to provide underlying support to limit downside movement, analysts added.

 

A market technician said bullish traders have some upside technical momentum on their side as prices are working their way up from the July low. The next upside price objective for November soybeans is pushing prices above solid technical and psychological resistance at US$9.00. The next downside price objective is closing prices below solid support at US$8.50.

 

First resistance for November soybeans is seen at Monday's high of US$8.88 and then at US$8.95. First support is seen at Monday's low of US$8.80 and then at US$8.75.

 

U.S. soybean crop ratings were unchanged from the previous week at 56% good-to-excellent. Analysts had anticipated crop rating declines of 1 to 3 percentage points.

 

Illinois crop conditions lost six percentage points, with 62% of the crop rated in good to excellent condition. Minnesota improved by 4 percentage points with 45% of its crop in good to excellent condition, and Missouri's crop ratings dropped eight percentage points to 36% good to excellent.

 

Ninety-six percent of the crop was reported blooming, compared to 92% last week, 96% last year and 95% for the five-year average. Eighty-four percent of the crop is setting pods, on par with last year at this time, but above the five-year average of 77%.

 

The National Oilseed Processors Association said Tuesday its July soybean crush rate was 142.5 million bushels. That was up slightly from the June figure of 141.6 million bushels and on par with the 142.6 million at the same period last year. Soyoil stocks were reported at 2.835 billion pounds. The stocks were down from the June stock figure of 2.951 billion.

 

The DTN Meteorlogix Weather Service forecast said the western Midwest has a chance for scattered showers and thundershowers during the next 24-48 hours. Dry conditions with only lingering light showers in southern areas are on tap for Thursday. Temperatures will average above to much above normal Tuesday and Wednesday, below normal north and near to above normal south Thursday, Meteorlogix forecasts.

 

In the eastern Midwest, there is a chance for a few thundershowers in the north early Tuesday. Scattered thundershowers are on tap for northern and eastern areas Wednesday into Thursday. Only a few light showers with isolated heavier amounts are seen in southwestern areas during this time. Temperatures will average above normal Tuesday, near normal north and above or well above normal south Wednesday and Thursday, Meteorlogix forecasts.

 

August soybean deliveries totaled 69 lots. A customer account at Man Professional Clearing Issued all the lots, with stoppers scattered among various commission houses. The last trade date assigned was August 10.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday on subdued trade and projections of a buildup in inventories, said trade participants. The benchmark October contract ended at MYR2,497 a metric tonne, down MYR33 from Monday after moving between MYR2,483 and MYR2,522/tonne.

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Tuesday, as spillover strength from soymeal futures pared earlier losses stemming from a weaker opening on the CBOT overnight trading session. The benchmark May 2008 soybean contract settled RMB3 lower at RMB3,615 a metric tonne, after trading between RMB3,585/tonne and RMB3,640/tonne.