March soybeans were down 12 1/2 cents late in the overnight session. Palm oil futures in Malaysia were down 1.2%, and China soybean futures were down 0.8%. Outside market forces are negative today with the strong US dollar and weakness in metals and energy markets helping to pressure. On top of a negative outlook for commodity markets today, the market is also trying to absorb an improving crop outlook for Argentina. Good rains are expected to fall this week in Argentina, and the extended outlook into next week also shows rain. As a result, there is more talk that crop conditions can stabilize and even improve in the next few weeks. November soybeans closed sharply lower with an outside-day down yesterday after the early run to new highs for the move. The market saw early gains on continued strong sales of US soybeans to China. The Chinese trade delegation last week signed contracts for a total of 11.52 million tonnes of soybeans, as there were further sales Friday after the 3.07 million tonnes announced on Thursday. In addition, US exporters reported that China bought 114,000 tonnes of US soybeans for the 2010/11 season. Vegetable oils are the focus of the inflation fight in China, and prices were down sharply overnight as tightening measures in India and inflation-fighting measures in China ahead of the lunar holiday have temporarily eased tightness fears. Traders see improving weather and crop conditions in Argentina as a limiting factor for prices this week. The market saw increased speculative selling into the mid-session yesterday to trade moderately lower on the day and move well under Friday's lows. Weekly export inspections came in at 42.08 million bushels, which was well above trade expectations and was more than double the 20.5 million necessary each week to reach the current USDA projection.
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