March soybeans were down 3 cents late in the overnight session. China futures closed up 0.5% overnight on weather concerns in South America, and Malaysian palm oil futures closed near unchanged on the session. Equity markets in Asia were stronger overnight, with Indian stocks finishing marginally weaker. European stocks managed to post some positive action, while US equity markets were mostly mixed. The US Dollar has started higher against the euro but was weaker against the Canadian, Swiss and Yen. Overnight the market saw generally favorable Euro zone December services PMI readings and Euro zone inflation readings that were down from the prior month but still holding at elevated levels. In other overnight developments, there were some slightly positive auction results from Germany and Portugal, and in the absence of other more important headlines, that news was seen as a sign that the Euro zone debt crisis remains under control. In looking ahead, the markets will see a series of private US chain store sales figures, weekly mortgage application readings and a Factory Orders report. Also due out later this session, is light US vehicle sales, but the main reading of the day is expected to be the US Factory orders report. Deliveries for January soybeans were 317 contracts. There were 33 meal and 314 oil delivered. March soybeans traded as much as 7 1/4 cents higher overnight, but futures pushed lower on the session early this morning. Less support from outside markets and talk that some moisture was added to the Argentine outlook for the middle of next week may have sparked some of the selling. Traders see very little moisture in Argentina in the next week or so, with rain expected across the heart of the growing areas on January 10-11 as the next good opportunity for relief from stressful growing conditions. The market closed 19 3/4 cents higher on the session yesterday but down 17 1/4 cents from the early highs. Talk of profit-taking by speculators, increased selling from US producers due to the new tax year and ideas that the market is overbought after a rally of more than $1.40 in just 12 trading sessions helped to spark the sell-off off of the early highs. The market continued to build a weather premium for South America dryness, compounded by a surge in outside market forces. A sharp drop in the US dollar, bullish economic news for China and a jump in gold and energy markets added to the bullish tone early in the session yesterday to push the market to the highest level since October 28th. The weekly export inspections report was released during the session yesterday, and it showed soybeans caming in at 34.056 million bushels, the high end of trade expectations. Shipments need to average 20.8 million bushels per week to reach the USDA forecast for the season. Cumulative shipments have reached just 566 million bushels, compared with 805.7 million last year by this date.
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