September 1, 2009

 

CBOT Soy Outlook on Tuesday: Down 2-3 cents; follow overnight, lack fresh support

 

 

Chicago Board of Trade soybean futures are expected to start Tuesday's day session on the defensive, following through on the overnight theme due to an absence of fresh supportive news.

 

CBOT soybean futures are seen opening 2 cents to 3 cents lower.

 

September soybeans could edge higher, buoyed by tight stocks and a lack of deliveries against the spot month.

 

Improving weather outlooks for developing crops in the Midwest are weighing on prices, with the absence of a frost threat limiting upside movement, analysts said.

 

Mild weakness in outside financial markets is expected to aide the lower tone, as the market awaits fresh support news.

 

However, a tight old crop carryover and the uncertainty of new crop potential due to the 2009 crop's need for an extended growing season are expected to remain underpinning features in the market, analysts said.

 

A technical analyst said first resistance for November soybeans is seen at US$9.90 and then at US$10.00. First support is seen at Monday's low of US$9.67 1/4 and then at US$9.50.

 

The T-storm Weather forecast said temperatures in the Midwest will continue to warm up from Friday through Sunday. This warm up will allow filling rates to occur at near normal rates, T-storm Weather said. Abundant sunshine is forecast for most days in the Midwest heading into the weekend.

 

U.S. Department of Agriculture on Monday reported 69% of the U.S. soybean crop was in good-to-excellent condition, unchanged from last week. Ninety-three percent of the crop was reported setting pods, on par with last year, but below the five-year average of 96%.

 

Three percent of the crop is dropping leaves, according to the USDA.

 

The report is a reflection of a late maturing crop, with soybeans as a whole probably needing to get through mid-October before encountering a hard freeze to reach their potential, said Mario Balletto, an analyst with Citigroup Global Markets Inc.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, but the fall was moderate compared with Monday's panic tumble as some short sellers squared their positions. The benchmark May 2010 soybean contract settled RMB27 lower at RMB3,671 a metric tonne.

 

Soybean output in Heilongjiang province, China's biggest producing region, is likely to fall by a higher-than-expected one third from a year earlier due to bad weather, a government-backed Web site said Monday. Drought and low temperatures, as well as the increasing possibility of an early frost in the northeast, are threatening the crop's output, said the China Oil Web site, backed by state-owned China Grain Reserves Corp., citing the results from its recent field trip.

 

Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday on speculative trade, while lower export estimates weighed on prices, said trade participants. The benchmark November CPO contract on the Bursa Malaysia Derivatives ended at MYR2,303 a metric tonne, down MYR67.

 

CBOT September soyoil deliveries totaled 2,869 lots. Customer accounts at Man Professional Clearing issued 844 lots. The house account at ADM Investor Services stopped five lots, while customer accounts at Man Professional Clearing stopped 1,058 lots. The last trade date assigned was Aug. 31.