August 25, 2006

 

CBOT Soy Outlook on Friday: Weaker on overnight losses

 

 

Losses in overnight trade and follow-through weakness are seen weighing on soy complex futures at the Chicago Board of Trade Friday, analysts said, with a softer trade expected across the grain floor.

 

Most-active November soybeans are called to open steady to 2 cents weaker. In e-cbot trade, November soybeans finished the overnight session 1 1/4-cent lower at US$5.63 3/4 a bushel. Soymeal was down 50 cents at US$164.30 a short tonne while soyoil fell 4 points to 25.55 a pound.

 

Soybeans bounced earlier in the week, but now with the end of the week here, the market is likely to do "back and fill" type trade, with some light position-squaring likely to go on as conditions for crop development are favorable.

 

"The weather is really benign," said Don Roose, president, U.S. Commodities.

 

DTN Meteorologix said Midwestern rainfall during the five-day period will favor filling crops but may be unfavorable for any maturing crops. There is no significant cold weather in sight.

 

In the Delta, scattered thundershower activity is possible early next week. Rainfall is still needed for any late filling crops but may be unfavorable for maturing crops. It is too soon to tell whether the current tropical depression, expected to be named Ernesto, located 345 miles south of Puerto Rico, will affect this area next week.

 

There's little fresh bullish news to support any gains, and news out of the John Deere/Pro Farmer Midwest crop tour didn't offer much for bulls.

 

Evaluations of Iowa soybean fields carried out by the John Deere/Pro Farmer Midwest Crop Tour generated average pod counts of 1175.64 pods per square yard, which was down 6.3% from the 1254.99 scout-counted pod average found in 2005. USDA estimated that, as of Aug. 1, Iowa farm fields were positioned to produce just 45 bushels of beans per acre this season, compared to 53 in 2006.

 

Average soybean pod counts in a three-foot by three-foot area in southern Minnesota evaluated were 1,091.01, below the 1,145.41 in 2005, but slightly higher than the three-year average of 1,043.42. The U.S. Midwest crop tour doesn't estimate soybean yields. Based on the August crop report, the USDA expects Minnesota to be the country's fourth-largest corn and soybean producing state. Pro Farmer is scheduled to release its national projections for total U.S. corn and soybean production Friday at 1330 CDT (1830 GMT).

 

Statistics Canada said the 2006-07 canola crop is expected at 7.977 million metric tonnes, in line with analyst estimates of 7.60-8.50 million tonnes. In 2005-06 StatsCan said the canola crop was 9.660 million tonnes. This figure isn't expected to have much market impact, Roose said, since the trade hasn't talked much about the report.

 

Soybean prices in China's major producing regions rose considerably in the week to Friday, supported by higher soymeal prices, analysts said as crushers stepped up their purchases.

 

In other news, Rotterdam soymeal were firmer and soybean prices were mixed. European vegoils were weaker.

 

Crude palm oil futures on the Bursa Malaysia Derivatives were down, as optimism about biodiesel was eclipsed by renewed concerns over high stocks. November slid MYR12 to MYR1,599 a metric tonne.

 

Soybean futures traded on China's Dalian Commodity Exchange slid on oversupply. January fell RMB9 to RMB2,552 a metric tonne.