November soybeans were down 8 cents late in the overnight session. Chinese soybean futures were down 1.9% overnight. They have closed steady or lower for 10 sessions in a row. Palm oil in Malaysia was down as much as 4.5% on the session before revocering late. While equity markets in Asia were generally weaker during overnight trading, stock indices in Europe were generally higher this morning. Early indications are that US equity markets will open with moderate gains. The US Dollar is lower against most of the major currencies this morning. German Chancellor Merkel stated that the powers of the European Financial Stability Facility need to be expanded in order to erect a firewall around Greece. A major US carmaker downgraded its outlook for the Chinese auto market this year, due to an end of government tax incentives and subsides. A private survey of German Business Sentiment during September was 107.50, better than market expectations but still a decline from August. The only major US economic number to be released this morning will be August New Home Sales at 9:00 AM. Outside market forces carry a positive tilt to some commodities, with the movement in the US dollar and strength in the stock market. The technical action is weak, but China was a buyer for the third time last week on Friday, so some demand is surfacing on the break. The eastern Corn Belt could see more rain for a few more days but the weather should clear up for a week or more after that. The western Corn Belt looks dry this week, which could boost harvest progress. Progress to date will be reported after the close. November soybeans closed 25 cents lower on the session Friday and lost 97 1/2 cents for the week. Weakness in the stock market and another jump in the US dollar plus weakness in energy and metal markets helped pressure the market Friday. Even a rally in wheat and strength in livestock and other sectors of the commodity markets failed to slow the long liquidation trend that sparked sharply lower closes for three sessions in a row last week to leave the market in an oversold condition. RSI is down at 13. Traders were expecting increased harvest selling pressures this week, and this added to the negative tone early on Friday. A turn higher in the stock market and lower trade in the US dollar failed to provide much support later on in the session, as a sharp break in silver and gold caught the attention of traders who were not comfortable holding longs through the weekend. The USDA confirmed a daily sale of 126,000 tonnes of US soybeans to China. That was the third day in a row that China made purchased. December meal lost $23 for the week, and December oil closed lower for five days in a row and lost 422 points for the week. The Commitments of Traders reports as of September 20th for soybeans showed non-commercial traders were net long 116,738 contracts, a decrease of 44,154 for the week. The aggressive long liquidation selling trend of the funds is seen as a short term negative force. Non-commercial and nonreportable traders combined held a net long position of 98,042 contracts, down a whopping 54,367 contracts in just one week. For soybean meal, non-commercial traders were net long 25,537 contracts, a decrease of 23,191 for the week. Non-commercial and nonreportable traders combined held a net long position of 35,657 contracts, down 31,395. For soybean oil, non-commercial traders were net long 29,698 contracts, a decrease of 12,915. Non-commercial and nonreportable traders combined held a net long position of 34,016 contracts, down 18,824.
Join the Discussion