May soybeans were trading 4 1/2 cents lower late in the overnight session. China futures closed slightly higher overnight and palm oil futures in Malaysia closed 0.8% lower. Hong Kong and Chinese equity markets were stronger overnight off of ongoing strength in real estate related shares. Shanghai hit a 15-week high. European equity markets were also generally higher off ongoing gains in banks and financial issues. However, early US equity market action was weaker in what seemed to be an ongoing disappointment over the perception of slightly reduced US QE3 prospects. Today's economic report slate only has a couple US reports due out and they might be considered third tier readings. The primary number this morning will probably be the New York ISM regional business index and that will be followed by a weekly economic activity index from the Economic Cycle Research Institute. A surge up in the US dollar and weakness in metal, energy and equity markets have cast a negative tone for commodities to start today. The overbought condition, weakness in outside forces and talk that the higher price is beginning to pull soybeans in Brazil out of producers hands are factors which might spark some increased selling over the short-term. Ideas that China will remain as an active buyer of US and south American soybeans with improved crush margins and expanding livestock has helped to support. May soybeans closed slightly higher on the session yesterday and the market has closed higher in 13 of the past 14 trading days. Futures were down as much as 13 3/4 cents led by concerns for the extreme overbought condition of the market after the recent run higher and ideas that Brazil supply is on a rise over the near-term. However, outside market forces turned positive after the lower trade early and the market managed to trade higher on the day into the mid-session. November soybeans gained on old crop as traders see the need for more planted area and the close was the highest since September 21st. Ideas that China buying might slow over the near-term was also seen as a factor to spark some long liquidation, profit-taking type selling early. A dock worker strike at the key export port in Argentina helped to provide some support as well. Argentina's President pegged the Argentina soybean crop at 48 million tonnes which is in line with the last USDA estimate but well up from recent trade expectations. The Buenos Aires Grains Exchange pegged soybean production at 46.2 million tonnes as compared with the last USDA forecast of 48 million tonnes. There were no soybean deliveries again this morning for the third day in a row. Weekly export sales for soybeans came in at 549,100 metric tonnes for the current marketing year and 427,300 for the next marketing year for a total of 976,400 which was higher than traders expected and comes on the heals of last week's sales which exceeded 4 million tonnes. Cumulative soybean sales stand at 83.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 87.1%. Sales of 211,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at just 40,000 tonnes which was well below expectations and oil sales came in at just 4,800 tonnes; also less than expected. Brazil exported 1.57 million tonnes in February from 1.01 million in January and 663,800 tonnes last year. There was only 1 contract for meal delivered bringing the total to 3. Oil deliveries came in at 756, down from 1,639 yesterday.
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