May soybeans were trading 5 1/4 cents lower late in the overnight session. China futures are closed again today. Palm oil futures in Malaysia were up 0.7% overnight. Asian equity markets were weaker overnight, with the New Zealand market managing to go against the regional down trend with a minor gain. However, reaction to news that China might move to break up a bank monopoly was unclear, due to a market holiday. European stocks were weaker overnight off the disappointment from the US Fed but perhaps some selling pressure was also seen from a concerning Spanish debt auction that saw yields climb to the highest level since January and that in turn seemed to apply some added pressure to European equities. The European markets didn't seem to be getting much support from the prospect of something positive from today's ECB meeting. US stocks were definitively weaker overnight, with the FOMC meeting minutes pushing many investors toward the exits. Given the downgrade in US growth prospects in the wake of the FOMC meeting minutes release yesterday, it is possible that the bar on upcoming US economic readings will be raised slightly. In other words, numbers under estimates could have a noted negative impact on physical commodity prices. From the scheduled report front, the US markets today will see a private jobs forecast, that supposedly will come in around +200,000 and there will also be an ISM Non Manufacturing report released in the early Wednesday trade. After a 98 1/4 cent rally off of last week's lows, November soybeans set-back off of yesterday's highs to close lower on the day. The reversal, plus a turn to a much more negative outside market influence for commodities are factors which could spark short-term long liquidation selling. A very active response to the release of the FOMC meeting minutes from March sparked an aggressive sell-off right into the close yesterday. Long liquidation selling hit the market as the US dollar surged, gold fell $35 and the Dow was down 110 points on the day and this sparked long liquidation selling. Outside forces are similarly negative this morning. The early rally pushed the market to the highest level since September 12th before the lower close and the reversal could attract new technical selling pressure. May oil also posted a new high for the move before the lower close. May meal did not make new highs before the weak close. The Argentina Rosario grains exchange pegged the 2011/12 soybean crop at just 43.1 million tonnes, down from 44.5 million as their previous estimate and down from the March USDA estimate of 46.5 million tonnes. This news provided solid support before the late sell-off. India meal traders sold meal to an Indonesia miller for what was thought to be a record price as a delay in shipments from South America may have forced the action. Meal basis levels were weak yesterday with talk that a shift to more wheat in feed rations could spark less need for meal. The fast shipment pace of soybeans to China has more and more traders believing that China import demand will be closer to 57-58 million tonnes for the year as compared with the USDA estimate of 55 million and last season's imports of 52.3 million tonnes. Between double crop wheat, cotton and corn acres, traders see the need for the market to attract near 1-3 million acres more in order to avoid tightness for the new crop season. For example, many traders see demand near 3.4 billion bushels for the coming season and beginning stocks near 245 million bushels. With this demand, even a jump of 2 million acres from Friday's USDA estimate and a trendline yield of 43.4 bushels per acre (41.5 last year), ending stocks come in at just 92 million bushels or a record low 2.7% stocks/usage.
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