November soybeans were down 26 1/2 cents late in the overnight session. China futures were down 1.3% overnight, and palm oil futures in Malaysia closed down 1.9%. Equity markets in Asia and Europe were sharply lower overnight, and early indications are that US equity markets will open with substantial losses. The US Dollar is sharply. A study conducted by the European Central Bank stated that the current sovereign debt crisis may put the sustainability of the Euro into question. There are reports that Qatar may be in negotiations to take a stake in major French bank BNP Paribas. A private survey of Chinese Manufacturing during August came in at 49.4, a decline of 0.5 from July. A private survey of Euro zone Service Industries during September was 49.1, roughly 2 points below market expectations. Euro zone Industrial New Orders during July were down 2.1%, weaker than projections. The Treasury's quarterly auction of 10-Year TIPS securities will have results announced today at 12:00 PM. Major US economic numbers to be released this morning include Weekly Jobless Claims at 7:30 AM, and a private survey of Leading Economic Indicators at 9:00 AM. The surging US dollar and weakness in energy markets adds to the bearish outside market forces. Talk of increasing harvest pressures just ahead plus the bearish influence of outside market forces helped to drive the corn market lower yesterday and overnight. The sharp sell-off in the Brazilian currency has sparked increased selling from Brazil producers, and China appears to have been a strong buyer of Brazil soybeans this week. This is not normal for this time of the year; China typically buys soybeans from the US at this point. This has traders nervous over slowing demand during a period of increasing supply. November soybeans came under heavy selling pressure late yesterday to close sharply lower on the session, and futures pushed to their lowest level since August 11th. Oil and meal also posted new lows for the recent downtrend. Outside market forces were slightly weaker yesterday and turned very negative overnight. Ideas that export news will remain slow due to high supply in South America and fears that US producer selling will increase as the harvest activity increases just ahead added to the negative tone. A negative technical picture has attracted increased fund selling, and the dollar surge overnight plus weekend news from the COT reports that speculators hold a hefty net long position is seen as bearish. The China National Grains and Oils Information Centre indicated that soybean production could slip 10.5% this year to 13.5 million tonnes. China confirmed August imports of soybeans at 4.51 million tonnes, which pushed the 8-month total to 33.58 million tonnes, down 5.5% from last year. Traders look for weekly export sales this morning to come in near 500,000 tonnes with a big range of ideas. Last week's soybean sales were 351,900 tonnes. The weekly broiler report showed that eggs set were down 7% from last year. This suggests there will be a sharp drop in poultry production in 8-10 weeks, and it suggests declining meal demand ahead. Russia is expected to harvest a record-high sunseed crop of 9 million tonnes as compared with 5.34 million last year.
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