May soybeans were up 14 1/4 cents late in the overnight session. China futures were up 1.8% overnight. Malaysia palm oil futures were up 1.2% overnight and were up more than 2% at times as higher energy prices lent support. Outside market forces appeared mostly positive with a lower US dollar and higher equity markets. There were no deliveries against the March soybeans overnight. Meal deliveries came in at 216 contracts with oil at 3,106. Too much rain in Brazil plus talk that Chinese producers may plant more corn and cotton and fewer soybeans this year helped to support the market overnight. The weaker US dollar and a perception that biodiesel demand will be strong due to rising energy prices has added to the positive tone. May soybeans closed 10 1/2 cents higher on the session yesterday with new crop soybeans gaining just 3 1/2 cents on the day. May closed near the high end of a 22 3/4 cent range. Talk of a slowdown in harvest in Brazil due to too much rain, a firm tone to the equity markets, and a bounce in palm oil lent support. However, a lack of new buying interest, ideas that Argentina's harvest is picking up steam, and talk that Brazil yields will be high once drier weather allows for harvest helped to push the market lower into the mid-session. The move under Monday's lows attracted increased selling from technical traders and added to the negative tone. Buyers emerged to support the market, and soybeans followed gold and energy prices higher instead of following the stock market lower. This was despite a bounce in the US dollar, which shifted from lower to higher as the day progressed. Another supprtive factor could be a potential delay in Brazil's harvest due to recent heavy rains. The forecast calls for a the wet trend to continue. However the persistent rains have caused many analysts to raise their forecast for Brazil's production this year. Traders also see a more active harvest pace in Argentina over the near term. Argentine tax inspectors raided the premises of 48 multinational grain exporters yesterday. This may have added to the support overnight, as commercial traders may have their confidence shaken. Traders are expecting Malaysian palm oil stocks as of the end of February to be at a 7-month low, but there is also talk that production is picking up in March.
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