May soybeans were trading 10 1/2 cents lower late in the overnight session. China futures were down 1% overnight. Palm oil futures in Malaysia closed down 0.3% overnight and closed down 2.6% last week after first hitting a 13-month high. Asian equity markets were weaker overnight, as traders in the Shanghai market decided to bank profits from a recent string of gains. However, the Japanese market was down apparently off lingering Euro zone fears. Surprisingly, European markets were higher to start, as the favorable start to the US earnings cycle last week seemingly prompted some initial gains in that market. Early in the US Monday trading session, share prices were higher with as many as 1/5th of the S&P 500 scheduled to report earnings this week. The US economic report slate today could be important with March retail sales due out and expectations calling for a minimal gain in that report. Also due out today are an Empire State Manufacturing survey, Treasury Capital flows, NAHB April housing index and Business Inventories. Many of the secondary reports are expected to be slightly lower and/or unchanged, but it is possible that the brunt of the focus today will be on the US retail sales figures. Ideas that the market is overbought and continued weakness in the other grains plus talk that China is nearly done booking old crop soybeans from the US has helped to spark recent weakness. Record open interest and a near record net long position from fund traders adds to the overbought view. Very strong demand from China continues to provide underlying support and talk of poor quality of soybeans in China reserve and talk of a sharp drop of 11.2% in planted area in China have added to the positive tone. A very tight outlook for the 2012/13 balance sheets for the US plus talk of strong demand has helped to support. Traders already expect 1-3 million extra soybean acres to be planted this spring above the current USDA forecast with much of the increase coming from double cropped wheat acres. May soybeans closed 4 1/4 cents lower on the session Friday and this left the market up 2 3/4 cents for the week. Long liquidation selling was noted late in the day. Another serious set-back in the US stock market and a very strong US dollar helped to spark some speculative selling; thought to be long liquidation. Concerns with a slower than expected growth pace for China and debt concerns for Spain have helped turn outside market forces weaker. With open interest at a record high and overbought reading on technical indicators, traders remain concerned with a possible technical correction over the near-term. Private exporters reported the sale of 165,000 tonnes of US soybeans to China for the 2012/13 season. This is the third sale for the week with a total of 445,000 tonnes going to China. Taiwan is in the market for 40,000-60,000 tonnes of US or Brazilian soybeans for May to June shipment. This business should go to Brazil at this time of the year. The July/November bull spread continues to gain and is now trading near 79 cent premium July as compared with a 42 cent premium early this month. The NOPA monthly crush report this morning is expected to show March crush near 144 million bushels and soybean oil stocks near 2.34 billion pounds. The Commitments of Traders reports as of April 10th showed Non-Commercial traders were net long 242,841 soybean contracts, a decrease of 1,966 contracts for the week and coming down from a record high last week. Commodity Index traders held a net long position of 149,931 contracts, down 20,174 contracts for the week and a fairly aggressive long liquidation trend. For meal, Non-Commercial traders were net long a new record high 92,929 contracts, an increase of 1,750 for the week. Non-Commercial and Nonreportable combined traders held a net long position of 113,366 contracts. For Soybean Oil, Non-Commercial traders were net long 55,048 contracts, an increase of 12,542 contracts for the week and the buying trend from fund traders is seen as a short-term positive force. Non-Commercial and Nonreportable combined traders held a net long position of 72,449 contracts, up 12,456 for the week. Commodity Index traders held a net long position of 102,734 contracts, down 979.
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