August 20, 2009

 

CBOT Soy Outlook on Thursday: 2-6 cents higher on strong demand, crop maturity

 

 

Soybean futures on the Chicago Board of Trade are expected to open 2 cents to 6 cents higher Thursday on strong demand and concern over delayed crop maturity.

 

In electronic trading, September soybean futures were up 2 1/2 cents to RMB9.99 1/2 a bushel, and November futures were up 2 3/4 cents at RMB9.60 3/4.

 

While Midwest rains this week aided crops in dry areas, low supplies and strong demand continue to underpin soybean prices, said Sterling Smith, market analyst with Country Hedging in St. Paul, Minn.

 

"We're looking at a big crop, but we're also looking at very, very strong demand," Smith said. "The outlook for soybeans remains reasonably bullish, even coming into harvest."

 

Earlier Thursday, the U.S. Department of Agriculture reported net export sales of 274,900 metric tonnes, up 6% from the previous week, but down 17% from the prior four-week average. China was the largest buyer, at 222,000 metric tonnes.

 

Traders will also be watching other markets, including U.S. stocks and crude oil. A rally in crude the previous two days helped soybean futures bounce back from an early slide Wednesday.

 

Soybean development in much of the Midwest is running a couple weeks behind schedule after a wet spring delayed planting. That leaves the crop vulnerable to an early frost, which could bring the growing season to a premature end and hurt yields.

 

Scouts on the 2009 Pro Farmer Midwest Crop Tour found disappointing soybean fields in Illinois, according to tour data released Wednesday.

 

The weak showing is a result of late planting and a season that has lacked heat to fuel the crop's growth, and scouts on various tours said the soybean counts were less than expected. Fields looked good from the road but often had disappointing pod counts, they said.

 

"When you get into Illinois, you expect to see those big, big yields," said Roger Bernard, leader of the eastern leg of the tour. "We did not find a lot of those."

 

Among technical chart points, support in November soybeans is pegged around the RMB9.40 1/2 intraday low Wednesday, with additional support at RMB9.37 1/2. Resistance is seen around RMB9.84.