July soybeans were trading 9 1/2 cents higher near 7:30 cst. China futures were slightly higher overnight and Palm oil futures hit a two-week high in Malaysia, up 0.8%. After some initial weakness Asian equity shares recovered off a growing anticipation of additional Chinese stimulus directly ahead. European equity markets were also slightly higher off Chinese stimulus talk and perhaps because of ideas that pro-bailout forces might be regaining some ground in Greece. The US markets were showing initial gains early this morning, as the US has become the preferred global equity market in the wake of relatively stronger US data from last week. The economic report slate today has a Chicago Fed Midwest Manufacturing Index, a Texas Manufacturing reading and a Case-Shiller home price survey and it remains to be seen if the US numbers can maintain their recent slightly better than expected pattern. The northern half of Iowa received good rains over the weekend and much of Illinois and Indiana which have not seen rain in more than a week are looking set to receive badly needed moisture this week. The negative weather for this week is partially offset by a more positive tilt to outside market forces. July soybeans traded moderately higher on the session early Friday but macro economic concerns for the weekend, weakness in the stock market and a turn from lower to higher for the US dollar helped to spark a set-back from the highs. Traders are a bit uncomfortable believing that rains late this week will completely ease dryness concerns. However, weekend weather models showed good coverage for the rains on Thursday and Friday of this week with areas of need seeing active coverage. The southern Midwest, the northern delta and the southeast all should receive a good rain event this week with more than 70% coverage of 1/2 to 1 1/2 inches of rain. This should help ease concerns for crusting issues and will alleviate top soil deficiencies in most areas. However, a return to a warmer and drier pattern into early June is seen as a strong possibility at this point and any confirmation of a ridging pattern beyond next week on the weather maps could spark more buying. This has helped to provide some underlying support. Cash basis levels are improving along the river system on talk of firm export demand and basis in Iowa was up as processor margins are favorable. This strong demand trend for exports and for crush has added to the positive tone. The Commitments of Traders reports as of May 22nd for Soybeans showed Non-Commercial traders were net long 208,024 contracts, a decrease of 11,764 contracts for the week and the selling trend is seen as a short-term negative force. Non-Commercial and Nonreportable combined traders held a net long position of 174,309 contracts, down 8,748. For Soybean Meal, Non-Commercial traders were net long 90,243 contracts, a decrease of 2,462 for the week and the selling trend is a short-term negative force. Non-Commercial and Nonreportable combined traders held a net long of 106,562 contracts, down 6,698 for the week. For oil, Non-Commercial traders were net short 16,178 contracts, an increase of 10,228 contracts for the week and the selling trend is a short-term negative force. Non-Commercial and Nonreportable combined traders held a net short of 19,871 contracts, up 12,037 for the week. Commodity Index traders held a net long of 92,038 contracts, down 1,747.
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