January Soybeans are trading 7 cents lower near 7:30 am cst. January meal saw modest losses overnight while oil trades 40 lower. Malaysian Palm Oil futures rose overnight on short covering ahead of a holiday weekend in areas of Asia. Asian stocks were weaker across the board with financials and auto maker shares leading the markets lower. South Korean shares fell down to a 7 week low and Australian equities were down because of weakness in resource and commodity related shares. European stocks were also lower in the wake of disappointing earnings from Ericsson and also because of weakness in French Banking shares. Early action in the US pointed to a weaker opening, with some players fearful of a soft GDP reading later this morning and others simply discouraged by overnight earnings results from Amazon and Apple. November options will expire at noon today with 1550 and 1560 as key price levels.

Export sales were impressive once again yesterday but fell below market estimates which set off a round of profit taking ahead of the weekend. Negative outside markets continue to weight on commodity markets which added to the negative tilt. The failure of January soybeans to move above Wednesday's highs at 1577 added additional downside pressure. Traded volume was pegged at 194,973 contracts and open interest declined by 2,439. The lower trade and adjustment lower in OI suggest profit taking and a neutral bias.

New farmer sales remain light but soybean movement remains liquid as resellers keep soybeans moving as a result of the lack of carry charges in the market. October barges were bid 83 over the November contract on solid demand and strong freight costs. It's estimated that world buyers have yet to purchase 60% of their soybeans for December and as much as 80% for January which is offering support to spreads and cash levels. Processor interest remains steady with most looking for deferred offers. Lafayette, IN bids jumped to 5 cents over from option price the November contract. Decatur, IL was unchanged at 18 cents over and Sioux City, IA bids dropped 5 cents to 5 cents under. Meal basis remains firm across the Corn Belt with the broader Illinois market quoted at $16 over and crush margins in the west are estimated at 80-90 cents through December. There is no soybean meal registered for delivery.

Export sales were somewhat of a disappointment to the market but at the same time still rather impressive. The trade hoping for 750,000 tonnes or more and the report showed net weekly sales at 522,200 tonnes. The USDA also reported that US exporters sold 120,000 tonnes of soybeans to an unknown destination for 2012/13 delivery. A high pressure ridge is still forecasted to set up in central Brazil this week and into the weekend. The ridge will break down early next week which could bring showers in behind it. Showers are expected to be scattered which will provide relief to some dry areas. Temperatures are expected to reach the high 90's to over 100 the next 5 days in Mato Grosso. Most of Argentina saw drier weather in the middle of this week with heavy rainfall expected to return by the weekend. Argentina's Buenos Aires Exchange pegged soybean planting at 2% vs. 6% last year. Planting is seeing modest delays due to wet weather conditions.

The Dow Jones-UBS Commodity Index announced that it will add soybean meal to its index in early January and cut soybean and oil holdings. The index will increase meal holdings from zero in 2012 to 2.6% in 2013. Soybean holdings will move from 7.08% to 5.49%. Soybean oil will see a cut from 3.37% to 2.74%. The entire soybean complex will now be included in the index in 2013.

 

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