CBOT Soy Outlook on Wednesday: Up 3-5 cents on dollar weakness, harvest delays

 

 

CBOT soybean futures are seen starting 3 to 5 cents higher. In overnight trade, November soybeans were 3 3/4 cents higher at US$9.96 3/4.

 

Weakness in the U.S. dollar continues to attract speculative buyers to commodities, and with tight nearby supplies providing fundamental support, the path of least resistance remains higher, a CBOT floor analyst said.

 

Wet weather across the Midwest and Delta are slowing harvest operations at a time when end users are scrambling to acquire available soybean inventories.

 

U.S. Department of Agriculture said Tuesday that 23% of the U.S. soybean crop was harvested as of Sunday, down from 49% at the same time last year and the five-year average of 57%.

 

The tightness of supplies is reflected in firm cash bids in export channels and lower-than-expected crushing activity.

 

National Oilseed Processors Association says 107.379 million bushels of soybeans were crushed in September. That's down from 112.617 million in August, and below the average analyst estimate of 113.2 million. The range of pre-report estimates was 110 million bushels to as high as 116.3 million bushels. The tightness of soybean supplies reduced crushing volume in September, as processors scrounged for supplies amid favorable crushing margins, analysts said.

 

Soyoil stocks were pegged at 2.262 billion pounds, down from 2.520 billion in August, and below the average analyst estimate of 2.417 billion. The range of estimates was 2.306 billion pounds to as high as 2.621 billion pounds.

 

USDA announced Wednesday private export sales of 110,000 metric tonnes of soybeans for delivery to China in the 2009-10 marketing year.

 

The DTN Meteorlogix weather forecast said rains in the U.S. Midwest overnight were some what heavier than expected, especially over the eastern belt. The outlook for next week is not very promising for harvesting as there will likely be cool, wet weather to talk about for the Midwest crop belt.

 

In the Delta, heavy rains returned to the region Tuesday, causing more problems for mature crops and halting any field work. The region may slowly dry during the coming days, but it should also be fairly cool. The region may turn fairly wet again by the middle of next week, Meteorlogix forecasts.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled a tad higher Wednesday, with the market consolidating without clear cues from CBOT. The benchmark May 2010 soybean contract settled RMB7 higher at RMB3,692 a metric tonne.