January soybeans were down 6 3/4 cents late in the overnight session. China futures closed near unchanged on the session, and palm oil futures in Malaysia were up 2% to a new 5-month high. While equity markets in Asia were lower overnight, stock indices in Europe were generally higher this morning. Early indications are that US equity markets will open weaker. The US Dollar is moderately stronger against most of the major currencies this morning, although posting a small loss versus the Yen. UK Unemployment during October was 8.3%, higher than market expectations. Euro zone Inflation during October was up 3.0% year-on-year, in line with forecasts. Major US economic numbers to be released this morning include the October Consumer Price Index at 7;30 AM, October Industrial Production and Capacity Utilization at 8;15 AM, a private survey of US Housing at 9:00 AM, as well as a private survey of mortgage applications released before the opening. November soybean deliveries totaled 1 pushing the total for the month to 3,766. Rumors that China bought up to 10 cargoes of US soybeans to support the rally yesterday could not be confirmed, but there were indications that the commercial firm in China that controls state reserves may have bought six cargoes, about 500,000 tonnes, of US soybeans. The continued firm tone for the US dollar and weakness in metal markets plus continued concerns that the European economy may fizzle helped to pressure the market overnight. January soybeans closed sharply higher on the session yesterday and pushed up to a 4-session high, as renewed optimism regarding China's import demand helped to support. Talk that China may be a more active buyer of soybeans for the 2011/12 season than the current USDA estimate indicates helped to support the strong recovery in soybean values in the past few sessions. Talk of strong livestock demand in China and talk that China will also be in a position to need to re-stock depleted reserves lent support. Ideas that China became more interested in soybeans since the stiff $1.16 3/4 break off of the October highs helped to support as well. In addition, traders see less of an increase in soybean plantings in South America and a shift to more corn as a reason for the recent bounce in soybean values. January soybean oil pushed to the highest level since October 27th. Palm was up strong overnight, due to concerns that there may be too much rain in the months just ahead that could slow production. Taiwan is tendering for 40,000-60,000 tonnes of US or South American soybeans.
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