November soybeans are trading 26 cents higher near 7:30 am cst and posted a new contract high. The new crop contract traded sharply higher overnight as soybean conditions were reported as slightly worse than expected on the first day of a closely followed crop tour. Soybean meal and oil traded sharply higher as well. Chinese stocks were stronger overnight, as corporate earnings prompted some buying overnight and that allowed the Shanghai Composite to rise to some of the highest levels for the month of August. French and German shares were also higher overnight, as talk of European bond buying kept attitudes positive toward the EU debt situation. The US scheduled report slate is rather thin today, with only some private chain store sales readings due out early and that could leave a speech from the Fed's Lockhart early in the session as the most important development of the trading session. November soybeans surged to new contract highs overnight as the demand for protein continues to climb as the outlook for the US soybean supply deteriorates on worse than expected crop tour reports. Strong underlying fundamentals mixed with a positive technical outlook remain supportive to the soybean complex. Export inspections for the week ending August 16th came in at 21.4 million bushels for the 2011/12 marketing year vs. 15.69 million bushels the week prior. Only 7.6 million bushels are needed per week to reach the current USDA estimate. 

The weekly Soybean Conditions Report showed 31% of the US soybean crop was now rated good/excellent compared to 30% last week and 59% last year. This was in line with market expectations. The lowest good/excellent rating for this time of year is 20% in 1988. US soybeans setting pods sits at 91% vs. 83% last week and 4% of the US soybean crop is now dropping leaves. The growth pace of the crop remains 2-3 weeks ahead of schedule with harvest expected to begin in the southern Delta this week or next. 

A large crop tour kicked off their week long drive around the Corn Belt yesterday with their 1st stops in South Dakota and Ohio. The tour does not estimate soybean yields due to the "normal" stage of growth for soybean plants at this time of the year, but the tour does estimate the average number of soybean pods. The tour pegged the average number of pods in South Dakota at 584.9 pods vs. the tour's 3 year average of 1,116.9 pods. Crop scouts in Indiana estimated that Ohio pods at 1,033.72 vs. the tour's 3 year average of 1,240.85 pods. Both groups cited highly variable stages of growth for soybeans and smaller than normal plants. The two groups of scouts will travel through Nebraska and Indiana today and state estimates will be released this evening. 

Cash soybean markets are supportive to the higher trade in futures as major importers of protein, including China, shift their demand needs to the US market. July China imports of soy rose 9.5% to 5.86 million tonnes. Total soy imports are up 20% year to date. The US export sales pace for 2012/13 remains 30% above the 5 year average signaling the strong demand from China and declining exportable surplus in South America. 

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