May soybeans were trading up 15 1/4 cents late in the overnight session. China futures closed 1% higher overnight and palm oil futures in Malaysia closed 1.6% higher to a 9-month high. Canola has also seen steep gains this week. Asia equity markets were higher overnight as investors were generally up beat toward the Greek resolution, but a slight abatement of inflation in China seemingly rekindled some talk of more easing from the PBOC overnight. However, somewhat disappointing Chinese retail sales readings probably served to countervail some of the optimism from the apparent end to the latest European debt flap. European equity markets were mixed following the resolution of the Greek debt swap, but the macro economic view seemed to usher in relief, as opposed to definitive optimism. US equity markets were showing initial weakness this morning, as the focus of the trade has seemingly turned from Europe to the US Non farm payroll results due out later this morning. Expectations for the readings later this morning call for a number above 210,000 but a number below +243,000 jobs (the prior month's gain) could leave some economics with the idea that US growth isn't accelerating. The results of the USDA report this morning will set the tone for the grain markets. Traders look for ending stocks to come in around 260 million bushels, down from 275 million estimated in February. World ending stocks are expected to drop to 57.75 million tonnes from 60.28 million last month as South American production is adjusted lower. Brazil production is expected near 69.5 million tonnes from 72 million last month and Argentina production near 47 million from 48 last month. Outside market forces are mostly neutral overnight but soybeans are trading sharply higher ahead of the report. Ideas that the US and China will see easy money policies just ahead and talk that dock workers walked off of the job in Argentina halting grain ships could be the reasons for part of the aggressive buying ahead of the report. May soybeans bucked the trend of the other grains to close sharply higher on the session yesterday and experience the highest close since September 21st. Supportive outside market forces and strong export news helped to drive the market moderately higher. However, weakness in the other grains and positioning ahead of the USDA report helped to pull the market to just slightly higher on the day into the mid-session. The other grains sold off late but buying was active in soybeans to support the late rally. On top of the weekly export sales, report, the USDA reported a daily sale of 165,000 tonnes of US soybeans for delivery to China for the 2012/13 season. Weekly export sales for soybeans came in at 1.015 million tonnes for the current marketing year and 630,800 for the next marketing year for a total of 1.646 million tonnes which was well above trade expectations. Nearly half of the old crop sales were for China. Meal sales came in at 123,700 metric tonnes for the current marketing year and 16,300 for the next marketing year for a total of 140,000. Sales of 92,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 15,500 metric tonnes which was also up from expectations. Sales of 8,000 metric tonnes are needed each week to reach the USDA forecast.
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