August 22, 2006

 

CBOT Soy Outlook on Tuesday: Steady-firm following overnight trade

 

 

Soy complex futures at the Chicago Board of Trade are expected to trade steady to slightly firmer Monday, modestly lifted by light gains in overnight trading.

 

Most-active November soybeans are called to open steady to 2 cents firmer. In e-cbot trade, November soybeans finished the overnight session 1/2 cent higher at US$5.61 3/4 bushel. Soymeal was unchanged at US$161.80 a short tonne while soyoil rose 13 points to 25.89 a pound.

 

"The market was a little overdone to the downside and there's nothing in the news that is out of line, so it might try and start a little firmer. I don't know if it will stay firmer, that depends on the funds," said one long-time floor analyst.

 

News for the market is light, so another quiet, choppy session can be expected, analysts said. The market will watch for developments out of this week's John Deere/Pro Farmer U.S Midwest crop tour for direction. While the tour has a little more significance for corn due to that crop's later development, tour data does have some influence on trade, especially if news varies from expectations.

 

Crop scouts on the western leg of the tour noted soybean pod counts of 922.78 in three-foot by three-foot squares from the 42 samples taken. This compares to last year's pod count of 1,013.05 when 31 samples were taken. The three-year average is 971.32. Scouts noted eastern South Dakota soybean crops were better than expected, while areas west were worse than expected. The group met Monday in Grand Island, Neb.

 

Despite the smaller plant size, pod counts west of the route didn't show much, if any, decline and the yields could finish fine with some additional moisture, scouts said.

 

On the eastern leg, evaluations of 57 Ohio soybean fields revealed average pod counts per square-yard of 1346.2 pods Monday. That represented an increase of just 1.2% from western Ohio tour calculations of 2005, dovetailing with recent USDA forecasts of steady soybean yields for the state.

 

Higher plant populations were found in Ohio, but the potential for higher soybean yields may be short-circuited by an ongoing stretch of dry weather, which has kept some sections of Ohio virtually rain-free for as long as a month, scouts said. The first day of the tour ended in Anderson, Ind., Monday.

 

The eastern leg of the crop tour will proceed westward Tuesday, with scouts largely evaluating acreage in Indiana, prior to reconvening in Bloomington, Ill. The USDA currently predicts a 2006 U.S. soybean crop of 2.928 billion bushels, representing a decline of 5.2% from last year.

 

The weather forecast remains unchanged. DTN Meteorolgix weather firm said the benign weather pattern in the Midwest continues to favor soybean development, as rain chances will be mixed with warmer periods during the next 10 days.

 

"The weather is bearish, so that could lend a little pressure," the analyst said.

 

In the Delta, temperatures aren't as hot and with some chance for thunderstorms during the next day or two. Stress to filling crops may be reduced somewhat but more rain is still needed, especially over Louisiana, Mississippi and Alabama.

 

In its weekly crop condition report, USDA said soybeans in good to excellent condition were 58% good to excellent, up from 56% a week ago, about as expected after recent rains. Ninety-three percent of soybeans are setting pods, up from 85% the week prior. USDA reported the leaf-dropping category for the first time this crop year, with 4% dropping leaves compared to 2% in 2005 and the five-year average.

 

Taiwan bought 23,000 metric tonnes of U.S. corn and 12,000 tonnes of U.S. soybeans Tuesday. Arrival dates for the entire parcel are Sept. 18-Oct. 2 if shipped from the U.S. Gulf or Oct. 3-17 if shipped from the Pacific Northwest.

 

In other news, Rotterdam soymeal prices are steady to mixed, while and soybean prices were steady-firm. European vegoils were mixed.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower after choppy trading Tuesday as participants, unconvinced about further upside room, took profits from recent gains. The benchmark November contract slid MYR13 to MYR1,597 a metric tonne.

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Tuesday. The most-active January 2007 contract settled RMB1 lower at RMB2,555 a metric tonne.