May soybeans were trading slightly lower late in the overnight session and up about 3 cents from the lows. China futures closed 0.4% higher overnight and palm oil futures in Malaysia closed 0.2% higher overnight after first posting an 8 1/2 month high. Asian equity markets were mixed overnight, with Hong Kong shares lower and Shanghai shares reaching the highest level since the middle of November. Japanese stocks started off higher off ongoing relief from ultra high currency exchange rates. European equity markets started off weaker as fears of slowing off of high oil prices was a wide spread theme. However, this fear was partially countervailed by decent auction results for Italian bills. One might have expected the Euro to have seen some support from news that the G20 had lined up a $2 Trillion rescue fund! In looking ahead to the US trade today, the markets will be bracing for a US Pending home sales report, which is expected to post a minimal rise and that will be followed by a Dallas Fed Manufacturing Index. Later in the trading session the market will also see some revisions on January US building permits data and that could be an important release. Outside forces look slightly negative. The market has seen solid buying support in recent weeks on continued revisions lower in South America production and much stronger than expected demand from China. Commercial traders believe that several cargoes of South America soybeans were shifted to the US last week as China end users might be nervous with the long lines to load out in Brazil and declining crop estimates. Producer selling is seen as slow in the US and traders eye a tightening US and world ending stocks for the upcoming new crop season as supportive. China's Minister of Agriculture indicated overnight that higher labor and fertilizer costs and uncertain weather will reduce China's grain harvest this year. May soybeans closed 3 1/4 cents higher on the session Friday and up 13 cents for the week. The market posted the highs early in the day and drifted lower but managed to hold support to close higher for the fifth session in a row and up 8 of the past nine days. Solid export news and ideas that the USDA will need to revise 2012/13 usage data even higher ahead with further adjustments down in South America production helped to support. Talk that China had bought 5-10 cargoes of US soybeans last week added to the positive tone and fund traders were noted buyers. Weekly export sales for soybeans came in at 1.159 million tonnes for the current marketing year and 2.873 million for the next marketing year for a total of 4.032 million tonnes. As of February 16th, cumulative soybean sales stand at 81.8% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 86.2%. Old crop sales of 223,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 216,000 metric tonnes as compared with 91,000 tonnes needed each week to reach the USDA forecast for the season. Oil sales came in at 25,200 metric tonnes as compared with 8,000 tonnes needed each week to reach the USDA forecast. The USDA put preliminary ending stocks for soybeans for the 2012/13 season at 205 million bushels from 275 million this year. The Commitments of Traders reports as of February 21st showed Non-Commercial traders were net long 115,445 soybean contracts, an increase of 15,267 contracts for the week and the aggressive buying trend is seen as a short-term positive force. Non-Commercial and Nonreportable combined traders held a net long position of 77,966 contracts, up a whopping 15,249 contracts for the week. Commodity Index traders held a net long of 166,645 contracts, down 2,855. For Soybean Meal, Non-Commercial traders were net long 14,101 contracts, an increase of 13,370 for the week and the buying trend is seen as positive. For Soybean Oil, Non-Commercial traders were net long 25,454 contracts, an increase of 12,131 contracts for the week and the aggressive buying trend is seen as a positive force.
Join the Discussion