May soybeans were trading 6 1/2 cents higher late in the overnight session. China futures were up 0.2% overnight. Palm oil futures in Malaysia closed up 0.5% overnight. Asian equity markets remained weak overnight, with Chinese stocks down from residual weakness in industrial material shares and from lower financial stock price action. European markets were higher to start on bargain hunting and optimism toward US earnings. Early in the US Tuesday trading session, US share prices were higher, with the markets looking ahead to Goldman and Coke earnings later today. The US economic report slate will present US Housing Starts and Permits, which are expected to be mixed and there will also be Industrial Production/capacity Utilization figures, which are also expected to be around unchanged levels. At least in the early going, concern toward Spanish debt was somewhat tamped down, as a T-Bill auction in Spain was judged to be sufficiently received. The more positive tone to outside market forces; especially the stock market, helped to support solid gains overnight. The short-term focus on the market seems to be on the weather and traders see profitable prices and good planting weather as reasons to suspect increased planted area for soybeans and corn. Talk that planted area will increase by 1-2 million acres from the March estimate may have helped limit the advance. With the surge in demand for US soybeans expected because of lower South American supply, even a record yield could show tight stocks for the coming year if plantings do not increase. Taiwan bought 60,000 tonnes of Brazil soybeans in their tender for US or Brazilian soybeans for May to June shipment. Ideas that China will continue to be a strong buyer of soybeans on the world market has helped to support the uptrend but after buying near 2-3 million tonnes last week, some lull in demand is expected. There is also talk that China might release more reserve stocks which is a negative force but there is also talk that quality could be poor for reserve stocks. May soybeans closed sharply lower on the session yesterday and saw the lowest close since April 4th. A bearish tilt to outside market forces and slower than expected crush demand plus weakness in other grain markets was enough to spark selling pressures early. The NOPA crush report showed March soybeans crushed at 140.53 million bushels which was well below trade expectations which were up near 143.8 million. Even with the lower than expected soybean crush, oil stocks came in higher than expected at 2.363 billion pounds. The negative demand news plus more talk that the market is overbought helped to pressure. A fire in the USDA building caused weekly export inspection data and weekly crop progress data to be delayed. Weekly export inspections came in at 18.06 million bushels which was well below trade expectations. However, export shipments need to average just 11.3 million bushels per week to reach the USDA export forecast for the season. While the equity markets saw some strength and the US dollar shifted from positive to negative on the day, agricultural markets remained under selling pressure yesterday with noted weakness in sugar, hogs, cotton, coffee and corn.
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