May soybeans were trading up 6 1/2 cents late in the overnight session. China futures closed down 0.3% overnight and palm oil futures in Malaysia closed down 0.3% after a strong rally early. Asian equity markets were higher overnight and that might have been partly the result of suggestions from the PBOC that they would continue to support the Euro zone by investing in debt in that region. European equity markets were also higher because of slightly up beat financial sector action and also because of the assurances from China. Early US stock market action was initially stronger. While the market saw somewhat soft GDP readings from portions of the Euro zone overnight, the trade seemed to focus in on the fact that the French economy clawed out some minimal growth. The markets also saw talk from the BOE that more QE might be necessary and that might be contributing to the partial risk-on vibe in the marketplace this morning. There will be continued testimony on the 2013 Budget and some Fed speeches today but the trade will also be presented with a very active scheduled report slate, with the most important reports being the Empire State Manufacturing survey and the Industrial Production/Capacity Utilization figures. Initial expectations call for modest improvement in most of the scheduled US numbers this morning. The market continues to find support from production uncertainties in South America due to poor weather for another 4-5 days in southern Brazil. China demand was strong last week and there could be announcements from their trade delegation this week or even today on purchases for the new crop season. Grain traders do not see much relevance but the signing of contracts to eventually buy the soybeans may see some media attention. On top of weather and China, there are some shipping issues with loaders in Santos Brazil and loadings could slow short-term. Brazil producer selling picked up some steam yesterday and this may have helped to pull the market off of the highs into the close. Outside market forces look strong to start the day today and March soybeans posted another new high for the mover. March soybeans closed slightly higher on the session yesterday but well off of the late-in-the-session highs. Weakness in equity and metal markets helped to spark some long liquidation selling late after the market traded at the highest level since October 27th. Expectations for hot and dry weather to continue for parts of southern Brazil and further signs of strong soybean export demand helped to support the market to trade higher. Rains are active in Argentina but southern Brazil looks dry and temperatures could be near 100 late this week. The USDA confirmed sales of 283,000 tons of US soybeans to unknown destination. Of the total, 215,000 was old crop and 68,000 were for the 2012/13 season. The NOPA crush for January came in at 142.813 million bushels which was below trade expectations and suggests sluggish domestic demand. With a tighter supply in Argentina and very cold weather in the Black Sea region, world vegetable oil prices pushed higher this week. India vegoil imports for January came in at 647,693 tonnes, down 6.4% from last year. Palm oil imports were up 3%.
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