August 18, 2009
CBOT Soy Outlook on Tuesday: Midwest rains enhance crop harvests
Soybean futures on the Chicago Board of Trade are expected to open 5 cents to 10 cents lower Tuesday as Midwest rains enhance prospects for this year's harvest.
In electronic trading, September soybean futures were down 10 3/4 cents to US$9.77 1/4 a bushel, and November futures were down 11 cents to US$9.43 1/2, after falling to US$9.42, the lowest since July 30.
"Widespread and substantial" rainfall is forecast for much of the major U.S. corn and soybean growing areas today through Thursday, according to private meteorologist T-storm Weather, LLC. Soil moisture by next week "should be ample," and problematic heat or coolness are not foreseen through at least early September."
This week's rains have brought relief to many areas of the Midwest, including Indiana, that had prolonged dryness, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC in Lafayette, Ind.
"We had several good storms come through that really alleviated things, soybeans especially," Zuzolo said. Rainfall in his area over the past day ranged from 0.3 inch to 0.5 inch, he said. "We've been extremely dry. We haven't had a good rain in three weeks.
News reports that the Chinese government was considering subsidies for its domestic soybean meal processors also weighed on the CBOT soy complex overnight, Zuzolo said. December soymeal fell US$2.80 to US$279.10 per tonne.
This week's wetter outlook has bolstered beliefs that farmers will reach the government's projection for a record soybean crop. Last week, the U.S. Department of Agriculture estimated the crop at 3.199 billion bushels, up 8% from last year.
In its weekly crop progress report Monday, the USDA rated 66% of the nation's soybean acreage in good to excellent condition, unchanged from the previous week.
Among technical chart points, the "big thing" in terms of support levels is the 200-day moving average of US$9.39 to US$9.40 for November soybeans, Zuzolo said.
