March soybeans were trading 17 cents higher late in the overnight session. China futures are closed for holiday for the entire week and Malaysia palm oil futures are closed for today and tomorrow. Australian equity markets were generally weaker overnight, but many Asian markets were closed due to holiday. Apparently Australian and other equity markets were somewhat undermined as a result of a lack of an agreement from Greek creditor negotiations over the weekend. While the EU announced an Embargo on Iranian oil exports starting on July 1st, the trade didn't seem to garner too much direction from that development, but it should be noted that crude oil prices seemed to regain some footing in the wake of that news. The markets did see minimally positive Spanish growth readings for all of 2011 and a prediction of a 1.5% 2012 growth rate from the Spanish central bank this morning. The US Dollar has started out weaker against the euro and it was also down against most of the actively traded currencies. In looking ahead, there will be a US State of the Union address and an FOMC meeting later this week, with US economic data reports not really an impact until durable goods are released later in the week. The weak US dollar and higher equity and metal markets this morning look to support grains. Ideas that some areas of northern Argentina did not see the coverage or amounts of rain expected helped to provide some support overnight but outside market forces were also quite positive and this helped to spark a more positive speculative buying environment. Talk of higher crush margins in China and improving demand from China for 2012 as compared with 2011 helped to support as well. The International Grain Council believes China import demand will jump 8.8% for the 2011/12 season to 57 million tonnes as compared with the current USDA estimate of 56.5 million. March soybeans closed 10 cents lower on the session Friday but managed to rally 28 3/4 cents for the week. A drier forecast for northern Brazil and a wetter forecast for Argentina helped to pressure the market early even though corn and wheat closed higher. With a forecast which increased rain totals and coverage for the weekend and early this week in Argentina and more rain at the back end of the 6-10 day forecast, sellers were more active and this helped drive the market lower. A lack of evidence of any switching of China soybeans from Brazil to the US added to the negative tone. Traders are hopeful that if northern Brazil rains stay active that harvest will be delayed and that some soybeans may be switched from Brazil to the US. Outside market forces were a bit negative Friday and this added to the negative tone with a sharp break in energy markets. A firm trade for corn and solid export sales news helped to support. Weekly export sales for soybeans came in at 991,100 metric tonnes which was well above trade expectations and to a 3-month high. Cumulative sales stand at 73.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 78.0%. Sales of 275,000 metric tonnes are needed each week to reach the USDA forecast. China was a net buyer of 367,500 tonnes. Net meal sales came in at 181,200 metric tonnes for the current marketing year and -3,200 for the next marketing year for a total of 178,000 which was also well above expectations. Sales of 96,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales came in at a whopping 18,700 metric tonnes as compared with sales of 9,000 metric tonnes needed each week to reach the USDA forecast. The Commitments of Traders reports as of January 17th for Soybeans showed Non-Commercial traders were net long 48,711 contracts, a decrease of 10,700 contracts for the week and the selling trend is seen as a short-term negative force. For Soybean Meal, Non-Commercial traders were net short 19,294 contracts, an increase of 7,980 contracts and the selling trend is negative. Non-Commercial and Nonreportable combined traders held a net short position of 16,482 contracts, up a whopping 9,288 contracts in just one week. For Soybean Oil, Non-Commercial traders were net short 7,674 contracts, an increase of 21,966 contracts which represents a change from a net long to net short position and is seen as negative. Non-Commercial and Nonreportable combined traders held a net short position of 12,653 contracts. Commodity Index traders held a net long position of 101,593 contracts, up an impressive 7,380 contracts and this helps to offset the aggressive selling from speculators. India oilseed plantings this season fell to 8.38 million hectares through Friday which compares with 9.03 million last year at this time.
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