November soybeans were down 20 3/4 cents late in the overnight session. Futures in China were down 2.7% overnight, and palm oil futures in Malaysia closed down 0.6%. While equity markets in Asia were generally weaker during overnight trading, stock indices in Europe traded higher early and then lower. Early indications are that US equity markets will open with moderate losses. The US Dollar turned from lower against most of the major currencies to slightly higher. G20 nations pledged to take all steps necessary to calm global markets at their meeting this week in Washington. The Chinese Foreign Ministry stated that letting the Yuan gain value alone would not solve the US/China trade imbalance. A survey of French Business Sentiment during September was at 99, lower than expectations. A survey of French Consumer Confidence during September was at 80, lower than market forecasts. There are no major US economic numbers to be released this morning. Weakness in metal and energy markets helped to pressure grains. Outside market forces remain weak as hedge funds from around the world seem to be exiting the commodities play with a focus on the deflationary aspects of actions in Europe and the US. Fund traders were active sellers yesterday to drive the market sharply lower, and the selling continued overnight to drive November soybeans down to their lowest level since March 16th. November soybeans are now down as much as $2.15 in just 16 trading sessions, or 14.7% off of the highs. Sharp losses in Asian and European stock markets plus a collapse in energy and metal markets sparked an aggressive long liquidation selling trend from speculators. Poor news for Chinese manufacturing seemed to spark the global economic fears yesterday after traders saw little help from US monetary policy. The USDA confirmed a daily sale of 180,000 tonnes of US soybeans to China yesterday, and the weekly sales came in about as expected at 404,400 metric tonnes. This pushed cumulative sales to 39.6% of the USDA forecast versus a 5 year average of 36.4%. Sales of 458,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales were better than expected, showing cancellations of 21,200 metric tonnes for the current marketing year and 197,100 for the next marketing year for a total of 175,900. Sales of 120,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales were below expectations, showing cancellations of 8,400 metric tonnes for the current marketing year and 10,900 for the next marketing year for a total of 2,500. India vegetable oil imports for the season beginning November are expected to be near 9 million tonnes due to rising consumption. Imports for the current season as expected near 8.2 to 8.5 million tonnes. November soybeans have lost as much as $1.05 1/2 for the week, and short-term technical indicators are showing oversold readings. Speculative long liquidation selling, fears of increased harvest selling pressures ahead plus ideas that China is buying more Brazil than US soybeans during a time frame which is normally US-dominated are seen as negative forces.
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