March soybeans were trading down 9 1/2 cents late in the overnight session. China futures closed down 0.7% overnight and palm oil futures in Malaysia were down 0.5%. Asian equity markets showed some weakness in the face of evidence of slowing in their January import/export data but some markets were able to recover off ideas the PBOC might be ready to shift away from a tightening stance. Some traders suggested that the Chinese numbers were weakened by the extended Chinese holidays. European equity markets were also mixed with some gains seen but a larger portion of the action coming in weaker. European markets were clearly disappointed with calls for even more austerity efforts from Greece. Early US stock market action was weaker in response to ongoing EU bickering and also because of revived fears of slowing in China. In the US trade the markets will see a US Trade balance reading that is generally expected to show a modest increase in the deficit. Also out during the US trade is a consumer sentiment reading that is expected to produce a minor up tick. While South America production was revised down by 5.7 million tonnes which was about in line with expectations, news that China import demand for the season was revised down by 1 million tonnes to 55.5 million and talk of record world ending stocks for wheat helped to turn the grain markets lower yesterday. The move higher to the highest level since October 28th and lower close yesterday is seen as a bearish technical development. China imported 4.61 million tonnes in January, down 14.9% from December and down 10% from last year. The Buenos Aires Grains Exchange left their soybean production forecast unchanged at 46.2 million tonnes and this compares with the USDA estimate yesterday of 48 million. The Brazil government (Conab) reduced their production estimate to 69.23 million tonnes from 71.75 million in January. The USDA was at 72.00 million yesterday from 74.00 million last month. While the weather news seems to suggest improving crop conditions in South America, these lower estimates may continue to provide some underlying support. March soybeans closed slightly lower on the session yesterday but down 20 cents from the early highs. The USDA report was considered neutral to slightly negative for soybeans. The USDA pegged US soybean ending stocks at 275 million bushels, unchanged from last month and a few million higher than expected. US demand numbers were left unchanged. World ending stocks for the 2011/12 season came in at 60.28 million tonnes, compared with 63.43 million last month and trade expectations at 61.4 million. Weekly export sales for soybeans came in at 603,200 metric tonnes for the current marketing year and 55,000 for the next marketing year for a total of 658,200. As of February 2nd, cumulative soybean sales stand at 77.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 83.3%. Meal sales came in at 161,900 metric tonnes for the current marketing year and 700 for the next marketing year for a total of 162,600. Sales of 94,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 22,200 metric tonnes which was much higher than expected. Sales of 9,000 metric tonnes are needed each week to reach the USDA forecast.
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