May soybeans were trading 6 1/2 cents higher late in the overnight session. China futures closed 0.3% higher overnight and palm oil futures in Malaysia closed 0.4% higher overnight and posting an 8 1/2 month high. Asian equity markets were higher overnight ahead of the upcoming European LTRO and also because of gains in Chinese banking shares off ideas that the PBOC might be poised to ease further. European equity markets were getting a fresh lift off favorable Italian debt auction results, which in turn provided the trade with a fresh measure of confidence. It is also possible that favorable German and Euro zone confidence readings contributed to the mostly positive tone this morning. In looking ahead to the US trade today, the markets will be bracing for a US Durable goods report, a private home price survey and consumer confidence readings. In general, the trade seems to be embracing a modest risk-on vibe early this morning, but it could take better than expected US scheduled data to keep that sentiment in place through the US data window later on this morning. The markets will also see at least two Fed speeches today, one of which is expected to be focused on the US housing sector. May soybeans have closed higher in nine of the past ten trading sessions and the positive outside market forces overnight supported the solid gains. Talk that weak China crush margins might slow their buying pace short-term plus talk of the overbought technical condition of the market are factors which might limit the advance. The International Grains Council lowered its forecast for world production for the 2012/13 season by nearly 4% to a three-year low of 246.5 million tonnes and the tightening US and world supply outlook for the new crop season continues to be a strong foundation for the current rally. Strong export demand kept a positive tone throughout the complex during Monday's trading. Rising concern over this season's South American soybean production also helped to underpin recent gains. Two major trade houses lowered their estimates for this season's Brazilian soybean production by over 2 million tonnes. Export Inspections for soybeans last week were 36.97 million bushels, slightly lower than market expectations. Shipments need to average 14.8 million per week to reach the USDA projection for the year. However, with the lower South American crop, traders are feeling more comfortable that the USDA forecast can be reached. Ideas that China will continued to be an active buyer of US soybeans and the outlook for declining ending stocks in the US for the 2012/13 season helped to support more active fund buying.
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