May soybeans were down 5 1/2 cents late in the overnight session. China futures were up 1% overnight. Malaysia palm oil futures were down 1.2%. Outside market forces appeared mostly positive overnight with a weaker US dollar and a recovery in world equity markets. There were no deliveries against the March soybeans. Meal deliveries came in at 241 contracts, about as expected. Oil deliveries were a whopping 5,490 contracts, which was more than twice what was expected. The continued outlook for good crops out of South America with a higher than expected exportable surplus remains a negative factor short-term. While prices in China had a positive tilt overnight, traders remained concerned that the jump in energy prices would only harden the resolve of China officials to fight inflation at the expense of growth. China was an active buyer of South America old crop soybeans last week and even bought some US new crop. China plans to sell 100,000 tonnes of rapeseed oil from reserves this week. They have sold 773,000 tonnes of edible oils since October. South Korea bought 165,000 tonnes of meal. That country has reduced its import tariffs for meal, corn and 32 other items to ease inflationary concerns. March soybeans closed 47 1/4 cents higher on the session Friday and just 2 1/2 cents lower for the week. A slowdown in the aggressive fund selling pace of the previous days plus a surge higher in corn and wheat helped drive the market higher. Export sales were weak, but traders thought that China was getting more active last week. On top of the weekly sales totals, the USDA announced a sale of 165,000 tonnes of US soybeans to China for the 2011/12 season. Weekly export sales for soybeans came in below trade expectations at just 134,600 tonnes for the current marketing year and 118,000 for the next marketing year for a total of 252,600. Cumulative sales stand at 90.2% of the USDA forecast for 2010/11 (current) marketing year versus a 5 year average of 80.9%. Old crop sales of 151,000 metric tonnes are needed each week to reach the USDA forecast. Old crop meal sales came in at 108,300 metric tonnes versus 86,000 tonnes needed each week to reach the USDA forecast. Net oil sales were just 1,000 tonnes, which pushed cumulative sales to 86.6% of the USDA forecast for the current marketing year versus a 5 year average of 47.1% sold for this time of the year. India is expected to process 12% more domestic oilseed crops this coming year, and this could trim edible oil imports by up to 5%. The Commitments of Traders reports as of February 22nd showed non-commercial traders were net long 132,903 contracts, a decrease of 24,909 contracts for the week. Commodity index traders held a net long position of 165,053 contracts, down 9,250 contracts for the week. The selling trend of the fund traders is seen as a short term negative force. For meal, non-commercial traders were net long 26,784 contracts, down 8,614 contracts in just one week. Non-commercial and nonreportable traders combined held a net long position of 42,392 contracts, down 15,383 contracts for the week. The spec selling trend is seen as a short-term negative force. For soybean oil, non-Commercial traders were net long 49,458 contracts, a decrease of 15,287 contracts for the week, and nonreportable traders were net long 9,890 contracts, a decrease of 2,696. The selling trend is considered a short-term bearish force for bean oil as well.
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