May soybeans were trading 4 1/2 cents lower late in the overnight session. China futures closed 0.2% lower overnight and palm oil futures in Malaysia closed 0.5% higher. Asian equity markets were weaker overnight with those markets disappointed in the dialogue from the US Federal Reserve Chairman on Wednesday. European equity markets were higher in the wake of supportive corporate earnings news from some large cap stocks. While the US Fed Chairman will offer up more testimony to Congress today, the market typically sees its biggest reaction to the initial testimony. Markets will see a rather active slate of US scheduled data with the claims figures followed by Personal Income and Personal Spending readings. Expectations call for a modest rise in Personal Income and Spending figures but that might be countervailed by an expected rise in Initial claims. Later this morning the market will also see an ISM Manufacturing report and expectations generally call for a rise in that reading. The markets will also see US domestic auto sales figures today and that could provide some direction. Outside market forces do not offer grains much direction this morning. The market was down sharply overnight but slowly recovered a bulk of the losses to trade just slightly lower on the day. China economic news was favorable overnight but China futures slipped as the market seems to be taking a breather after the recent surge higher. May soybeans have closed higher on 12 of the past 13 trading sessions as a surge higher in the US dollar and a massive break in gold and silver could not even hold the market back yesterday. Funds have been active buyers in recent weeks and traders appear hesitant to believe the buying will continue short-term. The active import pace from China has also been impressive but traders are also hesitant to believe that this pace will keep up as more and more soybeans become available in South America and China absorbs the recent import flurry. The market pushed moderately lower early yesterday led by a turn down in precious metal markets, weakness in the stock market and a turn higher in the US dollar. However, more export news plus concerns over slow export movement out of Brazil helped to support. The rally pushed the market to the highest level since September 22nd. The USDA announced a sale of 285,000 tonnes of US soybeans to China with 175,000 for the 2011/12 season and 110,000 for the 2012/13 season. Basis levels have held steady despite the recent run-up in futures which has added to the positive tone. The lack of deliveries for soybeans and meal was also seen as a supportive factor. Traders see increased selling out Brazil once exporters have a better feel for supply and once the soybean harvest picks up steam. Brazil basis is weakening in recent days and northern Brazil yields are seen as favorable. Traders remain concerned with poor crop conditions in southern Brazil. The line-up to load ships from Brazil has reached 15-20 days with peak harvest just ahead. For second notice day, there were no soybean deliveries again this morning. There was only 1 contract for meal delivered bringing the total to 2. Oil deliveries came in at 1,639 bringing the total to 3,664.
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