September 11, 2009

 

CBOT Soy Outlook on Friday: Steady up; exports, dollar, crop report neutral

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's day session steady to firmer, with supportive weekly export sales and weakness in the U.S. dollar offsetting a lack of enthusiasm from U.S. Department of Agriculture crop production data.

 

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

 

The production report failed to provide any surprises, making "the build up to the report better than the actual event," said Victor Lespinasse, analyst with Grainanalyst.com.

 

The market is expected to receive a boost from higher-than-expected weekly export sales, with declines in the U.S. dollar index providing some underlying strength as well.

 

U.S. Department of Agriculture projected 2009 U.S. soybean production at 3.245 billion bushels with a yield of 42.3 bushels per acre. The production figure was below the average Dow Jones survey estimate of 3.256 billion, with yields just off the average estimate of 42.4.

 

Production and yield data was seen at record levels, but that was not a surprise, said Joe Victor, analyst with Allendale Inc. The anticipation of strong demand, not allowing new crop stocks to build despite the jump in output is supportive, said Victor.

 

With the crop report out of the way, traders anticipate the market will return its focus to weather, looking to see if the 2009 crop can make across the finish line before a killing frost trims yield off a potentially record crop.

 

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. Filling crops would also benefit from any rains during this period, mainly in the west.

 

USDA projected 2008-09 U.S. soybean ending stocks of 110 million bushels, unchanged from its August estimate, but above the average analyst estimate of 102 million bushels.

 

U.S. soybean exports for 2008/09 were projected at 1.280 billion bushels, up 15 million from last month. USDA also trimmed residual use by 15 million bushels to 33 million.

 

The USDA projected 2009-10 soybean ending stocks of 220 million bushels, up from the August estimate of 210 million. Analysts on average estimated ending stocks of 226 million bushels.

 

USDA reported total weekly soybean export sales were a net 830,600 million metric tonnes for the week ended Sept 3. The primary buyers were China with 397,900 tonnes and unknown destinations 145,000 tonnes. Analysts had forecast sales between 300,000 and 500,000 metric tonnes.

 

Soymeal sales were a net 264,600 tonnes. Trade estimates ranged from 50,000 to 175,000 tonnes. Soyoil commitments were 9,500 metric tonnes. Analysts had forecast sales between 10,000 and 30,000 tonnes.

 

In overseas markets, China imported 3.13 million metric tonnes of soybeans in August, preliminary data from the General Administration of Customs showed Friday. In the year to date, total imports rose 20.6% to 29.61 million tonnes, the customs department said.