March soybeans were down 1/2 cents late in the overnight session. Malaysia palm oil futures were up 0.7% overnight and pushed to a new 3-year high. China soybean futures were up for the third session in a row, up 0.2%. Outside market forces look negative again today with a strong US dollar and weaker equity markets. The sharply lower close yesterday and the move under Wednesday's lows were seen as a short-term negative technical development for the market. November soybeans managed a new high for the move before the lower close. That reversal was also seen as warning of an overbought condition. Basis levels at the gulf were lower yesterday with talk of increased competition from Brazil. While yesterday's weekly export sales report for soybeans came in at 950,300 tonnes, only 20,800 tonnes were for the current crop. China is seeking to restock it supply of vegetable oil and is tendering for palm oil. This might be why Malaysian futures jump to a new 3-year high overnight. There are some indications that China may import 400,000 tonnes each month for the next few months instead of a more normal range of 500,000-600,000 tonnes due to the current high prices. They may continue to supply the local markets from their strategic stockpiles. China will offer 100,000 tonnes of rapeseed oil locally at its regular sale next week. There are indications that India's vegetable oil imports slowed down in January due to high prices. Traders cited of a lack of supportive newsm, sluggish old crop export sales and better South American crop conditions as reasons for the profit-taking yesterdya. Funds turned more active sellers as well, helping to drive the market another 10 cents lower late in the day for a close 20 cents lower on the session. The move under Wednesday's lows attracted increased selling. The export sales report also showed that as of February 3rd, cumulative export sales of soybeans stood at 88.7% of the USDA forecast for 2010/11 (current) marketing yearversus a 5 year average of 77.7%. Old crop sales of 163,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 182,700 metric tonnes, which was higher than expected. Sales of 87,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at a whopping 38,400 metric tonnes, which was more than twice the level of expectations. Cumulative soybean oil sales stand at 85.3% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 43.0%. Sales of 5,000 metric tonnes are needed each week to reach the USDA forecast.
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