September 30, 2008

 

CBOT Soy Outlook on Tuesday: Lower on bearish USDA stocks data

 

 

Chicago Board of Trade soybean futures are seen starting Tuesday's day session on the defensive, pressured by bearish data from U.S. Department of Agriculture.

 

CBOT soybean futures are called 5 to 7 cents lower.

 

Larger-than-expected soybean stocks as of Sept 1 are seen applying fundamental pressure for prices, with reports of cash protection as high as 10 to 20 cents expected to weigh on futures, a CBOT floor analyst said.

 

Quarterly soybean stocks in the fourth quarter of the 2007-08 marketing year were estimated at 205 million bushels as of Sept. 1, USDA reported. This was above the average analyst estimate of 144 million bushels and the 140 million bushel carry out in the September supply and demand report.

 

2007 soybean production was revised to 2.68 billion bushels, up 90.6 million bushels from the previous estimate. Planted area was revised up 1.11 million acres to 64.7 million acres. Harvested area is revised up 1.32 million acres to 64.1 million acres. The 2007 yield, at 41.7 bushels per acre, is up 0.5 bushel from the previous estimate, according to data from the USDA.

 

"The 2007-08 soybean production estimate, the upward revision, was pretty much in line with our thinking," said Terry Reilly, analyst with Citigroup in Chicago. "There were a lot more beans out there than we thought," he said. "That's going to be pressuring prices all day in the beans. Beans will be leading the rest of the CBOT grain markets probably lower," he added.

 

However, after a limit down close Monday, and supportive outside market influences, downside movement seems a little overdone, a CBOT floor trader said.

 

A technical analyst said the next upside price objective for November soybeans is to push and close prices above solid technical resistance at the August low of US$11.68 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the April low of US$10.45 1/4.

 

First resistance for November soybeans is seen at US$11.00 and then at US$11.35. First support is seen at US$10.75 and then at US$10.45 1/4.

 

Meanwhile, nine percent of the U.S. crop was harvested, compared to 3% last week and the average of 21%, USDA reported Monday. The USDA said 68% of the U.S. soybean crop was dropping leaves, up from 44% last week, but below the average of 81%.

 

The good-to-excellent rating for soybeans remained unchanged from last week at 57%, the USDA said. Analysts had expected the rating to remain steady.

 

Oct. soymeal deliveries totaled 540 lots. The house account at Term Commodities issued 300 lots, with stoppers scattered among various commission houses. The last trade date assigned was September 5.

 

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange recovered from losses sustained earlier in the day and ended off lows Tuesday, after shedding as much as 6.4% and hitting an 18-month low on selling pressure related to the global financial turmoil and weak crude oil. The benchmark December contract on Bursa Malaysia Derivatives ended MYR35 lower at MYR2,090 a metric tonne.