May soybeans were up 5 3/4 cents late in the overnight session. China futures were up slightly. Malaysia palm oil futures were up 2.6% overnight as traders saw increased demand for biodiesel due to higher energy prices. Outside market forces appeared somewhat positive, as world equity markets showed some strength and metal markets were higher. There were no deliveries against the March soybeans overnight. Meal deliveries came in at 241 contracts to bring the cumulative total to 482. Oil deliveries were 3,513 to bring the cumulative total to 9,003. The jump in soybean oil was the key to the bounce in soybeans overnight, as traders saw improving bio-diesel demand due to jump in gasoline and diesel prices from Middle East tensions. Ideas that the US balance sheet cannot afford too much extra demand over the next few months helped to provide some underlying support. The market managed to consolidate much of the surge higher in prices from late last week with talk that biodiesel demand could increase this year due to the reinstatement of tax credits in 2011 after their lapse in 2010. With the surge higher in cotton, traders are a bit concerned that corn and cotton are pulling potential spring acreage away from soybeans. The market closed moderately lower on the session yesterday despite strong gains in the other grains, a weaker US dollar and a higher stock market. A continued outlook for a hefty supply of Brazilian soybeans moving onto the world market and ideas that the rally on Friday was a bit overdone helped to pressure the market early. Outside market forces consisting of higher metal markets, a strong US stock market and a weaker US dollar failed to provide much support, and weakness in wheat and corn added to the negative tone early. Concerns with political unrest in North Africa and the Middle East helped to hold the market down. Traders expressed concern that too much rain in Brazil could slow the harvest there, but dry weather in Argentina had was seen as a reason the suspect an increase in their harvest pace. Traders noted that there was 9-mile backup at the loading facility at the key Paranagua port in Brazil despite the rains which was recognized as resulting from their record-size crop. Weekly export inspections released during the session yesterday, came in at 48.6 million bushels, well above trade expectations and above the 16.3 million bushel average needed each week to reach the USDA projection. Overnight, China sold 100,101 tonnes of rapeseed oil from reserves which was all that was offered. India is expected to process 12% more domestic oilseed crops this coming year, and this could trim their edible oil imports by 5%.
Join the Discussion