May soybeans were trading 1 1/4 cents lower late in the overnight session. China futures closed 0.2% higher overnight and palm oil futures in Malaysia closed 0.4% lower. Asia equity markets were lower off profit taking in the wake of slower growth projections from the Chinese leader at the NPC meeting in Beijing. European equity markets were also weaker in the wake of soft European February PMI readings, a softer Chinese economic outlook and also because of concerns toward the next Greek aid tranche. Not surprisingly, the US equity markets also look to start the new trading week marginally lower because of the slower Chinese growth talk and also because of residual Greek debt concerns. The US economic report slate today is somewhat active, with On-line help wanted, ISM Non manufacturing and Manufacturers shipments due out in the morning trade and at least three Fed speeches scheduled for later in the trading session. Expectations generally call for minor contraction in both the ISM and manufacturing shipments data and that could combine with the early risk-off vibe for a bearish physical commodity market environment early today. The overbought technical condition of the market plus the potential jump in producer selling are factors which could pressure the market early this week. Outside market forces carry a bearish tilt this morning and warm and drier weather over the weekend in Brazil could help boost harvest progress and help to spark increased selling. In addition, the steep rise in US prices may also attract increased selling from producers in the US. May soybeans have closed higher in 14 of the past 15 trading sessions and managed to gain 46 1/4 cents for the week last week. This leaves the market overbought and vulnerable to some type of a technical correction. The early weakness Friday stemmed from some speculative selling with talk of the overbought condition, a strong US dollar and weakness in energy and metal markets helping to pressure. The US dollar surge did not seem to slow the buying from fund traders and the market found support from higher trade in wheat and strength in meal which pushed the market to a new high for the move. News of more export business and some shipping concerns from Argentina may have helped to support more active buying from speculators and a rally into the mid-session which drove the market to the highest level since September 22nd. Talk that crop insurance guarantees for 2012 could encourage producers to plant more corn and less soybeans was also seen as a positive force. A strike by port workers in Argentina's export hub has delayed at least 57 grain ships according to a coast guard official. Private exporters reported to the USDA that 285,000 tonnes of US soybeans were sold to unknown destination. Of the total, 120,000 tonnes were for old crop and 165,000 tonnes were for new crop. The Commitments of Traders reports as of February 28th for Soybeans showed Non-Commercial traders were net long 135,802 contracts, an increase of 20,357 contracts for the week and the buying trend from fund traders is seen as a short-term positive force. Commodity Index traders held a net long position of 171,261 contracts, up 4,616 for the week and also seen as positive. For Soybean Meal, Non-Commercial traders were net long 30,711 contracts, an increase of 16,610 contracts for the week. Non-Commercial and Nonreportable combined traders held a net long position of 44,003 contracts, up 20,165 contracts for the week and also seen as positive. For Soybean Oil, Non-Commercial traders were net long 33,301 contracts, an increase of 7,847 for the week and the buying trend is positive. There are still no deliveries against the March soybean contract. There was only 1 contract for meal delivered this morning bringing the total to 4. Oil deliveries came in at 521 bringing month-to-date total to 4,941.
Join the Discussion