September 22, 2009

 

CBOT Soy Outlook on Tuesday: Up 7-10 cents on dollar weakness

 

 

A weaker dollar and generally firmer commodity prices should lift Chicago Board of Trade soybean prices in early dealings Tuesday, grain analysts said.

 

Most commodity markets are trading on the north side of steady, including gold and crude oil, and coupling that with gains overnight soybeans could see a firmer start for the session. Early calls are for soybeans to open 7-10 cents a bushel higher.

 

In electronic trade soybean prices rose, with the November contract gaining 7 1/2 cents to US$9.21 a bushel.

 

Grain traders are looking for a "Turnaround Tuesday" - that's when Tuesday's session is the opposite of Monday's activity. Since soybeans closed sharply lower Monday, Tuesday is expected to be firmer as the market rebounds from being oversold.

 

In its weekly crop progress report, the U.S. Department of Agriculture said 67% of the soybean crop was rated good-to-excellent, down one percentage point from the prior week. Traders were expecting ratings to hold steady. As has been the case all summer, the soybean crop's maturity is behind. Forty percent of the crop was dropping leaves as of Sunday, up from 17% the prior week, but down from 41% last year and the five-year average of 58%.

 

Bryce Knorr of Farm Futures said the USDA data suggests soybean yields fell around a third of a bushel per acreage nationwide, but are still up a little from USDA's last estimate at 42.9 bushels per acre nationwide.

 

If the support from the outside markets does not hold, soybeans could slip. Country Hedging said open interest increased after Monday's losses, which suggests new short - bearish - positions were established during the break.

 

Furthermore, beneficial crop weather and less-than-stellar soybean imports by China will lurk bearishly in the background.

 

DTN Meteorologix private weather firm said "crops in the Midwest region continue to benefit from near to above normal temperatures for at least the next five to seven days. Wet weather may cause delays to fall field work and early harvests in some locations; however, widespread delays are not expected."

 

Chinese soybean imports in August fell 18% on the year to 3.13 million metric tonnes, the General Administration of Customs said Tuesday. On the year, total soybean imports remain up 21%. Analysts there say the summer lull and the impact of state soybean stockpile sales dented August imports.

 

In other news, soybean futures rose slightly on the Dalian Commodity Exchange Tuesday, as favorable weather patterns continued to threaten prices with the promise of sizable crop supplies. May soybeans fell 0.1% to RMB3,711 a metric tonne.

 

Palm oil trading on the Bursa Malaysia Derivatives is closed for the Eid-ul Fitr holiday.

 

Lower freight rates and hopes for a better soybean crop could mean higher Indian soymeal exports in the marketing year beginning Oct. 1, although industry officials and analysts said it is too early to provide any export projection.

 

Prices for soybeans, soymeal and vegoils in Europe were all lower.