November soybeans were trading 6 cents higher late in the overnight session. China futures were up 0.9% overnight and palm oil futures in Malaysia closed up 2.1% at a 4-week high. Early indications are that US equity markets will open slightly higher. The US Dollar is near unchanged against most of the major currencies. A private survey of German Consumer Sentiment during late October came in at 5.3, higher than market expectations. A measure of French Consumer Confidence during October was at 82, higher than forecasts. Major US economic numbers to released this morning include a private survey of the US Housing market at 8:00 AM, and a private survey of US Consumer Confidence at 9:00 AM, and private surveys of store sales released during the session. The market continues to find solid support from outside market forces, but the rally yesterday could not take out Friday's highs, and the overnight bounce could not take out yesterday's highs, as the soybean market is not responding as well to outside forces as other key commodity markets are. While China's economic news was better yesterday and China is a major importer of US soybeans, the market rally was seen as a disappointment to some of the bulls given the bullishness of outside forces. Talk of weak crush margins in China and a lack of import demand from Europe so far this season are seen as negative forces as well. China imported 4.127 million tonnes in September, bringing the total for the 2010/11 season to 52.34 million tonnes, which is above the USDA estimate of 52 million. While traders see the possibility of a lower yield for the November USDA report, traders also view the USDA export outlook as too optimistic given the current big supply in South America and the good start to the planting season there. Ideas that planted area in the US will jump for all crops next year has also been seen as a negative force. Indian meal exports for the 2011/12 season are expected to reach 5.0 million tonnes, up from 4.1 million last year. The weekly Crop Progress report showed that the US soybean harvest reached 80% complete as of Sunday, compared to 69% last week and 91% last year. This was near the low end of expectations. November soybeans saw choppy trade yesterday, as the surge higher early in the session was impressive, but the market closed well off of the highs and near the middle of the range. Positive economic news from China and a surge higher in energy and industrial metal markets lent support. Weekly export inspections, released during the session yesterday, came in at 41.15 million bushels, which was in line with trade expectations and above the average of 27.8 million needed each week to reach the USDA projection. With better weather in Brazil, some analysts are increasing their production outlook to a record-high level of 75 million tonnes plus, up from 74.3 million this past season. Argentina's plantings begin in November, but rains are improving the soil condition ahead of then. Slow farmer selling and strong cash basis levels added to the positive tone, but the market failed to move over Friday's highs and futures settled back into the close yesterday.
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