November soybeans were down 6 1/4 cents late in the overnight session. Futures in China were down 2.2% overnight, and palm oil futures in Malaysia were down as much as 2.1% on the session to the lowest level in almost 1 year. While equity markets in Asia were mixed during overnight trading, stock indices in Europe were generally stronger this morning. Early indications are that US equity markets will open with moderate gains. The US Dollar is weaker against most of the major currencies, although it has posting a small gain versus the Japanese Yen. The German Parliament apparently voted on expanding the powers and scope of the Euro zone bailout fund this morning. Japanese Retail Sales during August were down 2.6%, weaker than forecasts. German Unemployment during September was 6.9%, lower than expectations. A survey of Euro zone Economic Sentiment during September was at 95.0, lower than projections. Major US economic numbers to be released this morning include the final revision of second quarter GDP and Weekly Jobless Claims at 7:30 AM, and a private survey of Pending Home Sales at 9:00 AM. Some relief in the Euro debt crisis and a firm tone for energy markets overnight was not enough to slow the long liquidation selling trend in soybeans, and the market pushed to the lowest level since December 16th. Funds have been noted as aggressive sellers over the past week, and there were rumors yesterday of index fund liquidation selling. Ideas that the harvest will pick up steam this week and talk that China is still booking Brazil soybeans instead of just US soybeans, which is typically done this time of the year, has helped to pressure prices. The weekly broiler report showed that commercial hatcheries set 188 million eggs into incubators for the week ending September 24th. This was down 9% from last year. It suggests poultry production will be lower into late this year and that demand for meal will be weaker. November soybeans closed sharply lower yesterday, with talk of increased harvest selling pressures ahead along with weak macroeconomic news helping to kept speculators in a selling mode. Concerns over European debt plus weakness in energy and metal markets sparked the early selling trend. The selling accelerated late in the day, and this drove the market below Monday's lows. Meal and oil came under selling pressures as well, with weakness in energy and palm prices helping to pressure. The market found some underlying support from talk that offers from South America on the world export market are starting to dry up as exportable surplus supply tightens. In addition, traders noted that soybean oil registered for delivery fell 494 contracts on Tuesday to 13,264 contracts, down nearly 1,200 contracts since September 19th. For the September 1st stocks report on Friday morning, it seems traders are expecting the September 1st stocks level to be right in line with the most recent supply/demand report update.
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