CBOT Soy Outlook on Tuesday: Up 10 - 12 cents, outside markets, crop concerns  

Chicago Board of Trade soybean futures prices are expected to rise in early day session trade Tuesday, buoyed by supportive outside market influences and fundamental strength from weather-related crop concerns.

 

CBOT soybean futures are seen starting 10 cents to 12 cents higher. In overnight action, November soybeans were 13 1/4 cents higher at US$8.98 1/4.

 

Wet, cold weather for Midwest crops continue to raise the threat of yield losses to late maturing soybean crops. That coupled with weakness in the U.S. dollar and firm crude oil futures open the door for a price bounce, as the market attracts short covering after falling to six-month lows recently, analysts said.

 

Harvest progress is moving at a slower-than-expected pace and with wet conditions expected in the Midwest and Delta this week, inventories of available soybeans for end users will remain tight.

 

However, yield reports from early harvesting have been robust and with market participants in general looking for higher crop projections in Friday’s government report, upside movement remains limited, a CBOT floor analyst said.

 

A technical analyst said first resistance for November soybeans is seen at Monday’s high of US$8.97 3/4 and then at US$9.00. First support is seen at Monday’s low of US$8.78 3/4 and then at US$8.60.

 

U.S. Department of Agriculture said 79% of the soybean crop was dropping leaves, up from 63% the previous week, but down from the average of 88%. Fifteen percent of the crop was harvested, down from 25% at the same time last year and the five-year average of 36%.

 

"With the maturity of soybeans, we’re going to get 90% of this crop free from any frost or freeze," said Joe Victor, vice president of marketing for Allendale. However, the lagging harvest does raise quality concerns for the soybeans, Victor said. That could support basis, he added.

 

The DTN Meteorlogix weather forecast said wet and cool conditions during the next three to four days will be unfavorable for mature crops and could delay the harvest in the U.S. Midwest. Cold conditions at the end of the week will help firm the ground and improve conditions for the harvest, through the Dakotas and Minnesota. Any immature crops, especially in the Northwest, could be at risk of damage as temperatures may fall into the upper 20s Fahrenheit later this week or this coming weekend, Meteorlogix said.

 

Meanwhile, wet weather during the week may continue to delay the soybean harvest in the Delta.

 

In overseas markets, crude palm oil futures on Malaysia’s derivatives exchange ended higher Tuesday in choppy trade, buoyed by weakness in the dollar, which led to a rebound in crude and soyoil futures, trade participants said. The benchmark December contract on Bursa Malaysia Derivatives ended MYR20 higher at MYR2,062 a metric tonne.

 

China’s soybean, soymeal and soyoil futures traded on the Dalian Commodity Exchange were closed overnight, as the exchange is closed for the National Day and Mid-Autumn Festival holidays.