CBOT Soy Outlook on Friday: Seen up 18-22 cents on plunging midwest temperatures

 

 

Soybean futures on the Chicago Board of Trade are expected to open 18 cents to 22 cents higher as colder than normal Midwest temperatures will impede crop development and raise the specter of early frost.

 

In electronic trading, September soybean futures were up 22 3/4 cents to US$10.22 a bushel, and November futures were up 21 cents at US$9.78, after reaching US$9.79 3/4.

 

Temperatures will drop as low as 53 degrees to 55 degrees Fahrenheit in Des Moines, Iowa, Minneapolis and other areas of the Midwest Friday and Saturday nights, according to the National Weather Service.

 

Corn and soybean development is a few weeks behind schedule across the Midwest after a wet spring delayed farmers' planting. An early frost could bring a growing season to a premature end, hurting yields.

 

"It's a weather market," said Dan Cekander, director of grain research for Newedge USA, LLC, in Chicago. "We keep a weather premium in the price for the possibility of an early frost from now until we finish the crop. The cold weather makes people nervous."

 

The first "killing" frost in the Midwest usually arrives from late September through mid-October, meteorologists said.

 

November soybeans have additional upside potential, possibly up to technical resistance levels around US$10.00 and US$10.50, Cekander said.

 

Weakness in the U.S. dollar, gains in crude oil futures and Chinese soybean demand also supported the soy complex, Cekander said.

 

Scouts on the Pro Farmer Midwest Crop Tour reported Iowa's corn and soybean crops looking much stronger than they did a year ago, despite storm damage in some areas that could weigh on yields. Soybean pod counts were up from a year ago.

 

At 2:30 p.m. EDT Friday, Pro Farmer will release national crop estimates based in part on tour findings.