May soybeans were trading 1 1/4 cents higher late in the overnight session. China futures were up 0.5% overnight. Palm oil futures in Malaysia closed down 1.4%. Asian equity markets were somewhat put off by softer than expected Chinese GDP readings but many markets in that region managed to recover off the idea that the softer Chinese data might clear the way for more Chinese stimulus ahead. European markets were weaker to start, as some investors came away from the Chinese readings disappointed in near term prospects. Record borrowing by Spanish banks in the month of March was another development that seemed to prompt some fresh contagion concerns, especially since that news came in the wake of the Chinese GDP disappointment. Early in the US Friday session, share prices were weaker in what would appear to be a precursor to a risk off day. The US economic report slate might not cause much of a change in the early track of sentiment as the CPI report follows the PPI report release from yesterday and there doesn't look to be much of a surprise due out from the inflation front. There will also be a private consumer sentiment survey and a couple Fed speeches but the Fed this week seemed to make sure the markets realized that Fed policy could swing in either direction depending on what was dictated by the US economy. With the overbought technical condition of the markets and a bearish tilt to outside market forces early today, some end-of-the-week long liquidation selling is possible. Open interest is at a record high and last week's COT report showed a record high net long position in soybeans and meal from non-commercial traders. Demand has remained strong this week and cash dealers were impressed with the China buying of old crop US soybeans at this time of the year. Traders expect bookings of new crop but normally, China buys from South America for spring and summer needs. A China agriculture ministry survey showed that soybean plantings this year could be down 11.2% as producers in the northeast provinces are shifting to corn. This could increase import demand ahead. South Korea seeks 60,000 tonnes of non-GMO soybeans. While the corn market sold off late yesterday, May soybeans stayed strong to close sharply higher on the session. Solid export sales news, a turn up in the other grains and a positive influence from outside market forces helped to support. On top of strong weekly sales news, private exporters reported daily sales of 189,000 tonnes to unknown destination with 79,000 of the total for old crop and 110,000 tonnes for new crop. In addition, sales were reported for 115,000 tonnes of US soybeans to China with 55,000 tonnes old crop and 60,000 for the 2012/13 season. Net weekly export sales for soybeans came in at 460,100 metric tonnes for the current marketing year and 176,300 for the next marketing year for a total of 636,400. Sales of 138,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 33,200 metric tonnes for the current marketing year and 129,500 for the next marketing year for a total of 162,700. Sales of 90,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales came in at 2,100 metric tonnes, all old crop. Ideas that China will remain a strong importer of US soybeans and fears of extremely tight new crop balance sheet has continued to provide underlying support. The Buenos Aires Grains Exchange lowered their forecast for Argentina soybean production to 44 million tonnes from 45 million previous.
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