July soybeans were trading 13 1/4 cents lower near 7:30 am. China futures closed down 1.4% to near 5 month lows. Palm oil futures in Malaysia closed 2.9% lower. Asian shares were under pressure overnight with Hong Kong shares reaching the lowest levels since late January. European equity markets were also showing renewed weakness, as key EU leaders openly debate the next steps to insure the survival of the Union. News that the EU set up a working group on Greece seemingly hints to some, that the troubled EU nation Greece might be poised for an exodus, while others think the EU is simply working even harder to keep Greece within the alliance. As least into this morning's trade, expectations for something substantial from the EU summit are running very low and there continues to be ongoing concern for a tranche of debt offerings on Thursday morning. The US economic report slate today presents US new home sales and since that news follows a noted jump in US existing home sales readings yesterday, there might be some minor hope for another decent reading from the US housing sector. The weather models continue to show a breakdown in the ridge pattern for next week with cooler and wetter weather. This, along with an active long liquidation selling trend in commodity markets due to global developments in China and Europe has helped to drive the market down to the lowest level since March 30th. July soybeans closed sharply lower yesterday and with the overnight weakness, the market is down as much as 89 cents from Thursday's highs and down as much as $1.51 1/2 off of the May highs. Mid-day weather models helped confirm rain events in the 6-10 day and the 11-15 day models for the central and southern Midwest and the eastern Corn Belt; areas which have been dry. This, along with a negative tilt to outside markets helped spark the long liquidation selling seen from fund traders. The sharp drop in corn and wheat plus news of record fast soybean planting pace added to the negative tone early. Some traders remain concerned with uneven emergence and crusting issues for parts of the Midwest which have not seen rain in the past week or more. The wetter forecast might reduce these concerns. December meal closed sharply lower on the session. December oil followed palm oil down this week and pushed to a new low for the year overnight. Argentina meal basis is firm and this could push demand to the US. Stronger demand for US meal is likely to push the crush pace higher and add to the soybean oil supply as crushers crush for meal. With the break in palm oil, the market has extended the discount to soybean oil which could keep soyoil demand sluggish.
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