September 10, 2009

 

CBOT Soy Outlook Thursday: Steady, mixed; awaiting USDA crop report Friday

 

 

Soybean futures at the Chicago Board of Trade are expected to start Thursday's day session steady to mixed, as traders take a cautious approach ahead of Friday's key crop reports.

 

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

 

The absence of fresh fundamental news and a lack of a strong influence from outside financial markets are keeping traders looking ahead to Friday's production and supply/demand reports, analysts said.

 

The evening of positions is seen as a featured attraction, but record crop production potential and the absence of a weather threat on the near term radar is expected to continue to promote defensive price action.

 

However, there remains a level of uncertainty in the market, as the need for late developing crops to escape a killing frost before October in the face of strong demand limits near term downside risks, analysts said.

 

A market technician said first resistance for November soybeans is seen at this week's high of US$9.43 and then at US$9.50. First support is seen at Wednesday's low of US$9.22 1/2 and then at this week's low of US$9.10 1/2.

 

The DTN Meteorlogix weather forecast said crops in the Midwest region will continue to benefit from near-to-above normal temperatures for at least the next 7 days and probably the next 10 days.

 

The U.S. Department of Agriculture is scheduled to release its September crop report at 8:30 a.m. EDT Friday. The average of 22 analyst estimates puts crop size at 3.256 billion bushels with a yield of 42.4 bushels per acre. The averages ranged from 3.186 billion to 3.309 billion bushels for production and 41.5 to 43.1 for yields. In August, the USDA projected a crop size of 3.199 billion bushels using a yield of 41.7 bushels an acre.

 

The USDA will release its weekly export sales report Friday at 8:30 a.m. EDT. The report normally released on Thursday was delayed due to the Labor Day holiday.

 

CBOT September soyoil deliveries totaled 1,174 lots. Customer accounts at Man Professional Clearing issued 601 lots while stopping 692 lots. The last trade date assigned was Sept. 9.

 

In overseas markets, China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, with government sales limiting the downside potential in contracts. The benchmark May 2010 soybean contract settled RMB26 higher at RMB3,620 a metric tonne.

 

China's soybean imports in November-December are likely to recover from the low levels in August-October to around 4 million metric tonnes each month, a government think tank said Thursday. This, combined with expected imports of 7.2 million tonnes in August-October, will translate to full-year imports of 41.68 million tonnes to 41.88 million tonnes, up 11% to 12% from a year earlier, said the China National Grain and Oils Information Center in its latest report.

 

Crude palm oil futures on Malaysia's derivatives exchange rose Thursday, tracking higher crude and soyoil futures, but dwindling demand and a likely rise in palm oil stocks capped gains, said trade participants. The benchmark November CPO contract on the Bursa Malaysia Derivatives ended MYR5 higher at MYR2,184 a metric tonne.