November 7, 2006

 

CBOT Soy Outlook on Tuesday: Seen lower; in tune with e-CBOT theme

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's session modestly lower, in tune with overnight declines amid a quiet news front.

 

Soybean futures are called to open 1 to 2 cents lower.

 

In e-CBOT trade, November soybeans were 1 3/4-cent lower at US$6.47 1/2 and January was 2 1/2 cents lower at US$6.60 1/4 per bushel.

 

The market is poised to follow the overnight theme, but analysts anticipate a choppy trend will remain intact as traders position themselves ahead of Thursday's crop reports.

 

The uncertainties of Thursday's crop report are expected to keep overall selling limited while outlooks for growing supplies and a swift South American planting pace applies light pressure, traders added.

 

Technically inspired trade is expected to remain a feature, but the market will keep a close eye on movement in corn amid perceptions soybeans are poised to lose 5 million to 8 million U.S. acres to corn in 2007 based on current price relationships, a CBOT floor analyst said.

 

U.S. Department of Agriculture reported Monday that 90% of the 2006 U.S. soybean crop was harvested as of Nov. 5. The overall harvest pace is on par with the five-year average of 91%. Analysts anticipated a harvested figure between 88% and 91%.

 

Eastern Midwest areas managed to make some solid progress last week, but continues to lag behind the average pace, analysts said. In Indiana, 86% of the crop was harvested, compared with 71% last week and the five-year average of 93%. Ohio's soybean crops were reported 77% harvested, up from last week's 68%, but below the five-year average of 91%.

 

The average of analysts' estimates taken from a survey compiled by Dow Jones Newswires for 2006-07 U.S. soybean production based on conditions as of Nov. 1 pegs the crop at 3.240 billion bushels. The estimates ranged from 3.193 billion bushels to 3.316 billion bushels. The average of estimates pegged 2006-07 ending stocks at 583 million bushels. The estimates ranged from 520 million to 635 million bushels.

 

The DTN Meteorlogix weather forecast said damp to wet weather will continue to delay crop harvests for Michigan, Indiana and Ohio. No significant harvest concerns are seen otherwise.

 

In Brazil, scattered thundershowers are seen maintaining soil moisture for early soybeans in most areas. Dry weather is expected to continue for the balance of this week and early next week in Argentina. This will favor field work but may also reduce available soil moisture, Meteorlogix reports.

 

In deliveries, a total of 1,674 delivery notices recirculated against the November soybean future. Issuers and stoppers were widely scattered among various commission houses. The last trade date assigned was Nov. 6.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Tuesday. Spot cash soybean bids were up 3 cents in Des Moines, Iowa, down 1-cent in Bloomington, Ill., and up 4 cents in Evansville, Ind., according to cash sources Tuesday.

 

Rotterdam soybeans were mostly higher and soymeal were mixed. European vegoils were steady to lower.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mixed Tuesday. The most active May 2007 contract settled at RMB2,826 a metric tonne, after trading between RMB2,816/tonne and RMB2,838/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives Tuesday finished sharply lower in what traders said was a technical correction, following recent rallies. The benchmark January contract shed MYR28 to end at MYR1,680 a metric tonne, a technical support level set by last Wednesday's close.