July soybeans were trading 6 1/2 cents higher late in the overnight session. China futures were down 0.3% overnight. Palm oil futures in Malaysia were down 0.6% after falling 2.4% yesterday. Asian equity markets were weaker ahead of the US jobs numbers but it should be noted that Shanghai shares were able to claw out some minor gains today. European equity markets were mostly weaker to start today and that action was probably inspired by another contraction in Euro zone services PMI data. However, Euro zone March retail sales figures were positive and stronger than expectations and that might have served to countervail some of the ongoing macro economic slowing concerns in that region. Expectations for the US Non Farm payroll report are all over the board, with some economists concerned about a residual weather impact from warm weather earlier in the year. There were 16 deliveries against May soybeans this morning bringing the total this month to 2,141. Oil deliveries this morning were 1,032 contracts. There were no meal deliveries for the fifth day in a row. The old crop soybeans recovered some of the steep two-day losses overnight with the market selling off as much as 47 cents after a reversal top. The trade continues to view the market as overbought and traders believe that much of the China buying spree has been priced. July soybeans closed moderately lower on the session yesterday while November closed near unchanged. Long liquidation selling from fund traders was active for much of the session with plenty of talk that fund traders own a record high net long position in both soybeans and meal by a significant margin. This, along with the key reversal has attracted profit-taking ahead of next week's Supply/demand update. December meal recovered from lower on the session to close near unchanged as well while December oil pushed sharply lower on the day to experience the lowest close since March 29th. Weekly export sales for soybeans came in at 1.732 million tonnes. Traders expected near 1.3-1.5 million. Old crop sales of 60,000 tonnes are needed each week to reach the USDA forecast. Meal sales were 151,700 and oil sales came in at 14,900 metric tonnes. Ideas that China could soon shift to using more government-owned reserves helped to pressure the market. Private exporters reported the sale of 232,000 tonnes of US soybeans to China for the 2012/13 season. South Korea is tendering to buy 55,000 tonnes of soybean meal for arrival in September. The Buenos Aires Grains Exchange cut their soybean production forecast to just 41 million tonnes, down 2 million from previous estimate and down from 45 million as the April USDA forecast. Traders see a sharp reduction from the USDA next Thursday and the first look at the 2012/13 season. US ending stocks estimates are expected to be historically tight as the lower South American crops push demand to the US all the way out to early next year.
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