May soybeans were up 1 1/4 cents late in the overnight session. China futures were down 0.4% overnight. Malaysia palm oil futures were up 1.1% overnight. Outside market forces are considered slightly supportive with a weaker US dollar and a firm tone to metals and equity markets. Higher energy markets are seen as a double edged sword. There were no deliveries against the March soybeans overnight with meal deliveries at 880 contracts and oil at 1,272. Outside market forces were supportive overnight and enough to offset some minor negative developments. The Argentina port workers strike is resolved for now and export licenses are being issued so movement out of Argentina is normal for now. In addition, there is better than expected rain chances for Argentina in areas which were drying out and this is seen as somewhat negative. Traders see too much rain again this week for Mato Grosso, Brazil which is seen as somewhat positive. May soybeans closed 2 cents higher on the session on Friday and up 18 1/4 cents from the lows of the day as a sharp rally in soybean oil helped support. Soybean oil is supported again overnight due to higher energy prices. May soybeans closed 39 cents higher on the week last week and moved to the highest level since February 14th. Ideas that a record crop from Brazil will eventually hit the market helped to limit the advance. Middle East tension concerns and ideas that higher energy markets could spark weaker global growth helped to keep a lid on the upside. Private exporters reported that 120,000 tonnes of optional origin soybeans were sold to China for the 2010/11 season and this news helped support. The selling emerged from the corn market first and this pulled meal sharply lower on the day. Sharply higher palm oil prices helped support soybeans and oil early. Private forecasts for a big jump in South American soybean production this year was seen as a limiting force on the upside. Rainy weather in Brazil has slowed harvest and has raised some concerns for a bumper crop. The Commitments of Traders Futures reports as of March 1st for Soybeans showed Non-Commercial traders were net long 131,228 contracts, a decrease of 1,675 contracts for the week. Commodity Index traders held a net long position of 160,921 contracts, down 4,132 contracts for the week. The selling trend of the funds is seen as a short-term negative force. For Soybean Meal, Non-Commercial traders were net long 22,933 contracts, down 3,851 contracts for the week. Non-Commercial and Nonreportable combined traders held a net long position of 37,286 contracts, down 5,106 for the week. For Soybean Oil, Non-Commercial traders were net long 65,193 contracts, an increase of 15,735 contracts for the week. Commodity Index traders held a net long position of 92,885 contracts, down 6,298 contracts for the week. News from China planning meetings were seen as positive. China's commerce ministry indicated over the weekend that China will try to expand channels where it imports grains and cotton so as to meet rising demand. In addition, there is talk that China will continue a proactive fiscal policy. In other words, the government will help stimulate personal income and consumption growth but also plans to fight inflation.
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