November soybeans are trading 9 cents lower near 7:30 am cst. Soybean meal and oil traded weaker overnight as well. There were no October soybean meal deliveries bringing the month to date total to 10. There were 1,336 soybean oil deliveries which brought the month to date total to 9,723. Malaysian Palm Oil futures finished higher after reaching a 3-year low yesterday. Traders expect the recovery to be limited as the bounce was likely due to short covering. Hong Kong shares managed a slight rise overnight, while mainland China markets remained closed for holiday. Europeans shares started out weaker today, despite minimally supportive news of a minor gain in Euro zone retail sales figures for the month of August. Apparently European investors are still a little disappointed with Spain's ongoing opposition to a bailout. US stocks were virtually unchanged this morning in the early going but the initial trade did seem to favor the downside. The US trade today will be looking ahead to the first Presidential debate tonight and the markets will also see the beginning of a series of private jobs reports this morning, but that news will be accompanied by an ISM Non-Manufacturing report which is generally expected to weaken.
November soybeans are now $2.66 off the contract high of $17.89 from September 4th. The relentless pressure on prices continued overnight as bulls search for something positive to latch onto. Yesterday's volume was impressive at 235,639 as prices broke lower and open interest dropped by 3,345 contracts. Reports of better than expected yields, fund positions that continue to be heavily weighted to the long side, and outside market instability continue to limit gains in the short term. In addition, many market participants expect an increase in the US Soybean yield in next week's USDA report which is adding to the negative tone.
A closely followed trade house released their revised US average soybean yield and production estimates after the close yesterday. The average soybean yield was reported at 38.2 bushels per acre vs. 36.7 in September. Production rose to 2.849 billion bushels vs. 2.739 previously. The USDA in September had yield at 35.3 and production at 2.634 billion bushels. Harvested acreage was left unchanged at 74.6 million acres. The increase in yield was expected but perhaps slightly higher than most in the trade anticipated. Given the current pace of export sales vs. the USDA forecast, most in the trade expect demand to be revised higher if soybean yields rise. This could offset some of the bearish enthusiasm in the long term.
Harvest activity was active in the western Corn Belt yesterday while slight delays were seen in the eastern Midwest due to rainfall. Farmers continue to deliver on existing sales but new sales are slow given the recent slide in cash prices. Soybean bids in Lafayette, IN rose by 8 cents per bushel to 2 cents under the November contract. There were reports of lower soybean meal prices near Frankfort, IN yesterday and Decatur, IL soybean bids were unchanged at 10 cents over the November contract.
Moisture levels in Northern Brazil and parts of Central Brazil remain below normal but recent rainfall has added some relief. More rainfall will be needed this month and a rain event is scheduled to show up in the 11-15 day period. Areas of southern Brazil continue to benefit from late September rainfall and soybean planting is underway. Extensive rainfall will move into Argentina late this week and again in the 11-15 day period.
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