January soybeans were up 4 1/4 cents late in the overnight session. China futures closed up 0.1% on the session, and Malaysian palm oil futures were down 0.2% overnight. Equity markets in Asia and Europe were generally higher overnight. The US Dollar is weaker against most of the major currencies. Euro zone finance ministers will meet today to work out how to leverage their emergency bailout fund and to approve their next aid tranche for Greece. A major credit rating agency warned that the US would receive a rating downgrade if there was no credible plan to lower the budget deficit by 2013. Japanese Unemployment during October was 4.5%, higher than expectations. Japanese Retail Sales during October was up 1.9% year-on-year, higher than forecasts. Euro zone Economic Sentiment during November was 93.7, slightly below expectations. Major US economic numbers to be released this morning include a private survey of Home Prices during October at 8:00 AM, a private survey of Consumer Confidence at during November at 9:00 AM, and a private survey of store sales will also be released during the session today. Follow-through positive action for global equity markets plus a weaker US dollar this morning may help to provide some support to the soybean complex today. In addition, the COT report confirmed an oversold technical condition and China still seems active on the world market. The slow pace of exports is still an issue, and there is still no serious threat to the South America production. These factors may limit the upside on any technical corrections over the near-term. January soybeans jumped early yesterday but failed to see much in the way of follow-through buying above 1125 and saw mostly choppy trade below this level for much of the session. The sharp drop in the US dollar combined with strength in equity and energy markets helped to support a more positive tone for commodity markets in general. Soybeans were pricing in a bearish global economic outlook late last week, and the shift to a little brighter outlook has lent support. Ideas that China may be a stronger buyer for the coming year than the USDA anticipates lent support as well. Taiwan is tendering to buy 23,000 tonnes of US corn and 12,000 tonnes of US soybeans. Weekly export inspections, released during the session yesterday, came in at 41.4 million bushels, which was right in line with trade expectations. This compares with 23 million bushels needed each week to reach the USDA projection. The palm oil discount to soybean oil has narrowed to just $28, the tightest in six months. This could help soybean oil become a bit more competitive on the world market. Current usage is strong in the US, and soybean oil stocks have continuedto tighten in recent months, but the $1 bio-diesel tax credit is likely to expire at the end of the year, and US production could slip. The lack of a serious weather issue so far in South America plus talk that there will be plenty of available acres in the US to see corn and soybeans expand has helped to pressure the market. The USDA Farm Service reported 9.6 million acres of prevented plantings in 2011, which was up sharply from 6.9 million in 2009 and 4.2 million in 2008. Also, an additional 1.6 million acres will move out of the CRP program for 2012. The Commitments of Traders reports as of November 22nd showed non- ommercial traders were net long 7,933 contracts of soybeans, a decrease of 17,880 contracts for the week. The aggressive selling trend is seen as a short-term negative force. Non-commercial and nonreportable traders combined held a net short position of 32,586 contracts, up 23,000. For meal, non-commercial traders were net short 32,852 contracts, an increase of 5,544 contracts for the week. Non-commercial and nonreportable traders combined held a net short position of 33,579 contracts, up 6,734. For oil, non-commercial traders were net short 20,512 contracts, an increase of 12,825 for the week. Non-commercial and nonreportable traders combined held a net short position of 27,247 contracts, up 18,160. Aggressive spec selling is a short-term negative force, but many traders view the complex as oversold.
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