September 11, 2008


CBOT Soy Outlook on Thursday: Slightly lower; two-sided trade expected



Chicago Board of Trade soybean futures are poised to open lower Thursday amid continued commodity liquidation, although two-sided trade is expected ahead of Friday's crop production report, analysts said.


In overnight trading, September soybeans were down 4 1/2 cents to US$11.77 per bushel and November soybeans were down 1/2 cent to US$11.77 1/2.


December soyoil was down 31 points to US$48.01 cents per pound while December soymeal was up US$1.90 to US$327.70 per short tonne.


The market is awaiting new crop production and supply and demand estimates from the government, which will likely limit price action Thursday, analysts said.


"All systems are down until the report is out of the way," an analyst said.


The market has been unable to sustain a rally recently, analysts said, and needs a jolt of bullish news to start climbing, analysts added.


The U.S. Department of Agriculture is scheduled to release its September crop report Friday at 8:30 a.m., EDT (1230 GMT). Analysts on average project a slight drop in production and yield from the government's August report, with a crop size of 2.950 billion bushels with a yield of 40.2 bushels per acre.


The DTN Meteorlogix forecast calls for temperatures to remain above freezing in the U.S. Midwest during the next 10 days, which will allow the crop to continue developing. Rainfall late this week and into the weekend will favor filling crops, although Hurricane Ike could cause flooding, according to the forecast.


In the Delta, rainfall from Hurricane Ike is expected to move through the area during the weekend, although there is still uncertainty as to how heavy or widespread the rain will be, according to DTN Meteorlogix.


The rainfall is generally seen as more helpful to the soybean crop than the corn crop because soybeans have a later season and more maturation left before harvest.


The USDA reported net soyoil export sales for the 2007-08 and 2008-09 marketing years of 400 metric tonnes. Analysts expected between zero and 15,000 metric tonnes.


Net soymeal export sales were reported at 83,100 metric tonnes. Analysts expected between 65,000 and 130,000 metric tonnes.


An analyst said key support for November soybeans is at the contract's May low of US$11.65. The market has dipped below, but not closed below that price level, the analyst said.


China's soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on coming new supplies and overnight losses at the Chicago Board of Trade.


The benchmark January 2009 soybean contract settled RMB29 lower, or 0.7%, at RMB4,004/tonne after trading in a range of RMB3,976-RMB4,028/tonne.

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