March soybeans were up 2 1/2 cents late in the overnight session. China futures were down slightly overnight. Malaysia palm oil futures were up 1.7% overnight. Outside market forces look better today with less fears of escalating tensions in North Africa and the Middle East. From an oversold condition, any sign that Middle East/North Africa tensions will not escalate will be seen as a positive factor for today. Traders see a risk of slower global economic growth as a negative demand factor if energy prices continue to climb. However, ideas that this idea is overblown and talk that China is an active buyer of South American soybeans on the break this week helped to support. The market put in the lows of the day in the first hour of trade yesterday before seeing a strong rally late in the day to take the March futures higher before closing down just a few cents lower on the session. While closing lower, March soybeans closed up about 18 cents off of the early lows. Traders noted continued long liquidation selling pressures early but the selling dried up late. Talk of slower China demand, slower crush demand and continued good weather for South America helped to pressure. For the USDA Outlook Conference, the USDA left US plantings at 78 million acres with ending stocks pegged at 160 million bushels from 140 million this year. Production was pegged at 3.345 billion bushels which would be the second highest on record. Exports were pegged at 1.575 billion bushels, also the second highest on record and down from the 1.59 billion forecast for this season. China imported 5.15 million tonnes of soybeans in January, up 26% from last year and down 5% from December. The Ministry of Commerce believes February imports will be 3.17 million tonnes and then 3.16 million in March. Soybean oil imports in January jumped to 160,283 tonnes, up 121% from last year as imports from Argentina resumed after the trade spat last year. Palm oil imports were 416,017 tonnes, down 23% from last year. The Census crush for January was just 149.17 million bushels which was more than 2 million bushels below expectations. Weakness in palm oil and a further sell-off in China soybeans added to the negative tone. The Buenos Aires Grains Exchange revised their production estimate for soybeans to 48.8 million tonnes for the 2010/11 season, up from the previous estimate of 47.0 million tonnes. Traders see weekly export sales near 400,000 tonnes for the release before the opening. The USDA Outlook Forum speaker presentations today may be watched closely.
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