March soybeans were trading up 7 cents late in the overnight session. China futures closed down 0.2% overnight and Malaysia palm oil futures were up 1%. Asian equity markets were mixed this morning, with Shanghai stocks rising despite somewhat soft Chinese PMI readings. However, the Nikkei and Australian equity markets were weaker. European equities were generally higher off positive UK services PMI data. In the early action today, US equities are showing minimal gains to start, but movement is probably being limited ahead of the monthly US non farm payroll report. In retrospect, overnight data was somewhat soft but markets in Asia and Europe seemed to spin the news into a positive. Perhaps the trade is looking ahead to the US Non farm-payroll results, which generally have a range of estimates of gains from just below 100,000 to as high as 190,000. In addition, the US will also see a factory orders release and the ISM Non Manufacturing release for January. Expectations for both Factory Orders and the ISM non manufacturing readings generally call for modest gains but those readings might be partially overshadowed by the residual impact from the payrolls. March soybeans have recovered to the highest level since January 26th overnight as talk of China and Europe buying US soybeans this week helped to support the market. Traders see improving weather in Argentina this week and rains for the dry areas of southern Brazil by late in the weekend and early next week. However, the emergence of strong demand for US soybeans this week helped to provide underlying support. The USDA attache in Argentina pegged the soybean crop at 46.5 million tonnes as compared with 50.5 million last month. Ideas that the USDA outlook Forum first look at the 2012/13 supply/demand outlook could show lower soybean ending stocks and higher corn ending stocks has helped support soybeans as well. The market saw volatile trade yesterday and traded both sides of unchanged only to close 8 cents off of the highs but slightly higher on the day. A turn down in the US dollar and a bounce in equity markets plus a firm cash basis level helped to support a strong recovery from the weak opening. Weakness in wheat helped to pull the market off of the highs. On top of the weekly sales news, Taiwan buyers are in the market for up to 60,000 tonnes of US or South America soybeans for late March shipment. Net weekly export sales for soybeans came in at 308,400 metric tonnes for the current marketing year and 60,000 for the next marketing year for a total of 368,400 which was below trade expectations. Cumulative soybean sales are down 31% from last year and stand at 75.8% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 82.2%. Sales of 268,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 74,700 metric tonnes as compared with a weekly average of 96,000 tonnes necessary each week to reach the USDA forecast. Oil sales were 6,700 metric tonnes as compared with 10,000 necessary each week to reach the projection.
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