12/08/04, CEDAR FALLS, Iowa (Dow Jones)--U.S. soybean futures areexpected to open with strong gains Thursday after the governmentsurprisingly cut both 2004-05 production and ending-stock estimates morethan expected, analysts said at a Chicago Board of Trade press briefingfollowing the U.S. Department of Agriculture's release of its August cropproduction and supply and demand reports.In addition, Vic Cook, managing director of Global Weather Services inOverland Park, Kan., said by telephone that with the abnormally cooltemperatures currently in the Midwest, there is a "higher-than-normalchance for an earlier-than-normal frost" this crop season.The U.S. soybean data was definitely the surprise for the market, acrop analyst said during the CBOT teleconference.The USDA pegged 2004-05 soybean production at 2.877 billion bushels,down from 2.940 billion in the previous report and below tradeexpectations of around 2.97 billion.U.S. soybean ending stocks fell 20 million bushels to a tight 190million bushels. Soybean exports for 2004-05 were trimmed 20 millionbushels to 1.030 billion bushels."The biggest surprise today (Thursday) is the soybean yield comingdown from the prior report. The market was expecting something obviouslyhigher. So with that, and especially in light of yesterday's (Wednesday's)new lows on fund selling, we'll probably get a positive response," saidRichard Feltes, director of research at Refco.However, the USDA raising global stocks of soybeans, corn and wheat inThursday's supply and demand report may temper the bullish enthusiasm insoybeans, he added."Globally we're swimming against the tide on the grains...and withmore soybean stocks at the end of the marketing year," Feltes said.Seasonally, action in the soybean market favors the bulls at thistime of the year as prices have generally risen on the August USDA cropnumbers, Feltes said. "Longer term, the March contract has been up betweenthe 18th of August and the 4th of September in 15 out of the last 16years. November beans have been up nine of the last 15 years in the weekfollowing the August crop report," he said.However, with global demand "withering," it may be difficult to keepsoybean futures headed higher in the long run, Feltes added.China will continue to hold the key for U.S. grain and oilseedexports, Feltes said, as the world learns more about its internal marketsand food needs. However, Beijing's grains stocks are still a state secret,"and we as analysts here in the United States still don't know what theyhave on hand," he said.On soybeans, Cook said he was surprised by the USDA trimming theaverage U.S. yield to 39.1 bushels an acre."Our Global Weather Service crop model expected them to be a littlehigher than that. I, for one, think that we might see some increase inthat number between now and the September values," Cook said.While temperatures in some areas of the Midwest are 15 to 20 degreeslower than normal for this time of year, a warming trend is expected andtemperatures should be close to normal by the middle of next week, hesaid.Temperatures may still be cooler than normal after that, "but notabnormally cool like we have been the last few days," Cook said.Comparing statistical data from the last 50 years, Cook said his GWSstaff found that the majority of the 10 coolest summers were followed bycooler-than-normal autumns."If we carry that trend on, there is a probability that we'll see acooler-than-normal autumn this year and it may translate this year intothe chance for an earlier-than-normal frost. There are no real goodnumbers yet on when that frost might be and whether or not it'll be earlyenough to do any damage, but that's the way the statistics look rightnow," Cook said.Chances for an earlier-than-normal frost in the upper Midwest are near65% to 70%, he estimated.