July soybeans were trading 6 1/4 cents lower near 7:30 cst. China futures closed 0.4% lower overnight while Malaysia palm oil prices were down 1.4%. Stocks were weaker in China, with Hong Kong stocks falling down to a fresh multi week low overnight and the Shanghai Composite also under pressure in the wake of another round of disappointing private Chinese manufacturing readings. European equities were also weaker early this morning, with investors apparently put off by the disappointing Chinese data released overnight. While German data overnight was also discouraging that news might have been partially countervailed by a surprise pick up in May UK retail sales figures. In the end, weakness in equities around the globe suggests that the US extension of operation twist was not seen as an overly positive extension of the pattern of global central bank easing. However, strong demand at a series of EU member debt auctions overnight has served to truncate anxiety a bit. In looking ahead, the trade will see an active US scheduled report slate today with claims, Leaders and existing homes sales due out. Early estimates call for weakness in two of the scheduled US reports and an unchanged reading in the third. The forecast continues to provide hope for the bulls and the bears as some scattered rains and cooler temperatures have traders a little less concerned with deteriorating crop conditions. However, rain amounts still look too light to help offset increased needs for the crops plus cumulative dry soils after weeks of below normal precipitation. Overnight rains in Iowa and Missouri helped to ease crop concerns and traders see parts of east central Illinois into the heart of Indiana seeing rain chances improve for late this weekend. These are areas in bad need of rainfall. Soybeans rallied for the fourth consecutive session yesterday on a warm and dry forecast for the next 10 days. Scattered showers are expected to move from eastern Nebraska to the northern plains in the short term forecast. The 11-15 day map continues to show dry conditions for the eastern Midwest and parts of the Delta but some models do not show heat. Overall, no drastic change has been made to the forecast for the next 2 weeks. December soybean oil rallied and made new highs near 52.00 on rumors that China bought Argentinean soybean oil and could soon shift their demand to the US soybean market due to available supplies. The U.S. Dollar traded lower for most of the session, but rallied late in the afternoon as the Fed released statements on the status of the U.S. economy. Soybeans were able to shrug off the lower commodity trade, led by crude oil, and finish near the highs of the session. Exports sales are estimated at near 850,000 tonnes for this mornings weekly export sales update. Topsoil conditions as of June 17th were short to very short for 85% of the state of Indiana. Ohio and Missouri were not much better at 77% and 82%, respectively. The weekly Crop Progress report as of June 17th indicated only 32% of Indiana's crop was rated good to excellent. Our records show only one other year (1988) where conditions were worse. Illinois was not much better, with only 47% of the crop rated good to excellent versus 64% last year.
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