May soybeans were trading 6 cents lower late in the overnight session. China futures were 0.8% higher overnight. Palm oil futures in Malaysia closed down 0.7% overnight. Equity markets in Asia were weaker overnight, with the market unable to spin a positive Chinese manufacturing forecast into a distinct positive. European markets were also weaker to start today off fresh CDS and debt concerns from the Netherlands. Early in the US trade today, share prices were sharply lower, with the markets apparently seeing a continuation of Euro zone debt problems directly ahead. Adding into the negative vibe toward the Euro zone, was a weaker than expected Euro zone April services PMI result. While the US economic report slate today is effectively empty, many markets have seemingly started the new trading week in definitive risk off position. Rumors that Brazil would limit or restrict exports were denied by the Brazil government over the weekend. With record high open interest in soybeans and a record net long position of speculators in meal, traders remain nervous over the possibility of a long liquidation correction led by bearish economic news out of Europe and weakness in the other grains. May soybeans closed 31 cents higher on the session Friday and managed to close 10 cents higher on the week. Aggressive fund traders buying, especially into the close, helped to support the strong gains and helped push the market to the highest level since early September. Talk of large short positions for the 1420, 1430 and 1440 strike prices for the expiring May calls were seen as a factor to fuel the buying as the shorts rushed to own long futures as an offset to the short call positions. Grain markets were higher early Friday led by continued talk of strong demand for old crop soybeans and a bullish tilt to outside market forces. Traders see good crush margins in China plus a tightening supply of un-booked soybeans from Argentina and Brazil as a positive force. Concerns that there could be another drop of near 2-3 million tonnes for South America production for the May USDA report helped to support. Argentina cut its production estimate for the 2011/12 season to just 42.9 million tonnes as compared with 44 million as their previous estimate and compared with 45 million as the last USDA forecast. Open interest forged another new all-time high of 827,059 contracts as compared with 551,998 at the beginning of March. The Commitments of Traders reports as of April 17th for Soybeans showed Non-Commercial traders were net long 244,158 contracts, an increase of 1,317 contracts for the week. Non-Commercial and Nonreportable combined traders held a new record high net long position of 203,057 contracts, up 1,232 contracts for the week. Commodity Index traders held a net long position of 148,386 contracts, down 1,545. For meal, Non-Commercial traders were net long a new record high 99,831 contracts, an increase of 6,902 contracts for the week. Non-Commercial and Nonreportable combined traders also held a new record high net long position of 121,699 contracts, up 8,333 for the week. For oil, Non-Commercial traders were net long 54,483 contracts, a decrease of 565 contracts. Commodity Index traders held a net long position of 101,269 contracts, down 1,465. South Korea bought 35,000 tonnes of optional origin soybeans. The Canadian planting intentions report tomorrow morning could show a jump in canola plantings to nearly 21 million acres from 18.862 million last year as there appears to be far less weather issues so far this season.
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