July soybeans were trading 10 cents higher near 7:30 cst. China futures closed up 0.8% and Palm oil futures in Malaysia closed up 0.5%. Chinese stocks were stronger overnight, as the Chinese data was not as bad as was expected at the end of last week and the news of Spanish Bank aid has seemingly tempered global debt tensions. European equities were cheered by news of the Spanish bank aid move but some focus in the region is likely to begin shifting toward this weekend's Greek elections. Given a slight expansion of loan activity in China, decent export data, sharply higher Spanish bank share price action and positive initial US equity market action, there would appear to be a modest risk on vibe in place to start the new trading week. The US report slate is mostly empty today, with a San Francisco Fed Conference on Asian banking and Finance the only scheduled event on the docket today. The weather is not as supportive as some traders were hoping for but could still see declining soil conditions in parts of the US over the next few weeks. There is less heat and more rain in the forecast for next week after the rains in the next few days ease stress. Strong demand from China, positive economic news from China and ideas that both old crop and new crop ending stocks are tightening has helped to support. For the USDA supply/demand report for tomorrow morning, traders see a drop of near 20 million bushels for ending stocks for the 2011/12 season from 210 million last month with many traders looking for a sharper drop. For new crop, traders appear hesitant to revise estimates much lower than last month's 145 million bushel carryout estimate which is already extremely tight. Traders see a 2-3% decline in crops rated good to excellent for the weekly update this afternoon. China imported 5.28 million tonnes in May, up 8% from the previous month and up 16% from last year. The French Farm Ministry pegged the 2012 winter rapeseed crop at 4.8 million tonnes which is down 9.7% from last year. The market saw a strong recovery from the lows on Friday to close just slightly lower on the session but November could never push higher on the day and closed down with an inside trading session. News of more demand from China, less than expected pressure from outside market forces and a somewhat threatening forecast for the next few weeks helped to support. While traders see rain for Monday to Wednesday of this week, the coverage and amounts have been reduced slightly. However, decent coverage of 3/4 inches or more for many areas of the Midwest should help to ease topsoil moisture concerns. In addition, parts of the delta look to receive good rains this week. The much above normal temperatures and below normal precipitation for much of the Midwest in the 11-15 day forecast models helped to provide underlying support Friday however, weekend models did not show the heat and also showed some rain next week as well so the weather situation is not as bullish as traders thought going home on Friday. The USDA reported export sales of 410,000 tonnes of US soybeans to China with 60,000 on the total for old crop. In addition, Egypt was a buyer of 120,000 tonnes of US soybeans for the 2011/12 season. The Commitments of Traders reports as of June 5th for Soybeans showed Non-Commercial traders were net long 176,969 contracts, a decrease of 27,405 contracts for the week and the long liquidation selling trend is seen as a short-term negative force. Non-Commercial and Nonreportable combined traders held a net long of 147,276 contracts, down 23,789. For Soybean Meal, Non-Commercial traders were net long 73,989 contracts, down 10,584 for the week. Non-Commercial and Nonreportable combined traders held a net long of 92,011 contracts, down 12,258 and the spec selling trend is considered negative. For Soybean Oil, Non-Commercial traders were net short 37,221 contracts, an increase of 9,855 contracts and the selling trend is seen as a short-term bearish force. Commodity Index traders held a net long position of 87,061 contracts. This represents a decrease of 945 contracts in the net long position held by these traders.
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