November soybeans were down 12 cents late in the overnight session. Malaysian palm futures were down as much as 2.6% but recovered part of the losses late. China soybean futures closed down 2.9%. Outside market forces were mixed today as financial markets were quieter. The dollar was a bit weaker and gold was up, but equity markets were down. While equity markets in Asia and Europe were generally weaker during the overnight session, early indications are that US equity markets will open with moderate losses. The US Dollar is weaker against most of the major currencies this morning. Early indications are that the Bank of Japan sold 4.5 trillion Yen during yesterday's intervention, a record amount. Germany, France and Spain are scheduled to have talks concerning the financial markets later on this morning. The French Trade deficit during June was 5.6 billion Euros, smaller than expected. A private survey of UK Housing Prices was up 0.3%, slightly higher than expectations. The UK PPI during June was up 5.9% year-on-year, in line with forecasts. Major US economic numbers to be released this morning, include July Non-Farm Payrolls, July Private Payrolls and July Unemployment at 7:30 AM. Meal deliveries against the August contract this morning came in at 104 contracts with oil deliveries at 130. There are still no deliveries for August soybeans. The soybean market saw follow-through selling in the overnight session with a "step aside" theme for many fund traders who did not want to get caught holding longs during a stock market collapse. With less heat in the Midwest forecast and increased chances of rain, traders see crops stabilizing, but there is a general sense that the weather for the second half of August will be key for the yield outlook. It will not take much of a yield decline from the USDA trend yield forecast to see ending stocks tighten for the coming year, as long as the demand remains strong. A prominent research firm pegged yield at 42.5 bushels per acre yesterday, which was down 0.9 from the USDA's forecast. This would leave ending stocks near 108 million bushels compared with 200 million this year. At this point, it appears that more than 50% of the Midwest and Tennessee Valley will receive 1/2 to 2 inches of rain, and then cooler weather moves into the Midwest for the 6-10 day time frame. The heat stays to the south for the next two weeks, and the northern half of the Midwest looks to receive rain. The only crop issues with this forecast will be for the delta where it could be too hot and dry (Arkansas) and for the central Midwest areas which may not get rain in the next five days. Thailand bought 150,000 tonnes of meal from South America. November soybeans closed down 2% yesterday and pushed to their lowest level since July 12th, and the overnight break took the market to its lowest level since July 7th. December oil was down to its lowest level since March 17th this morning. The collapse in the US stock market and a surge higher in the US dollar was not a good combination for the soybean complex yesterday, as this attracted increased selling pressure from fund traders and sharply lower trade. Fears of global economic weakness and declining demand helped to pressure. Weekly export sales for soybeans, released before the open yesterday, came in better than expected at 680,200 tonnes. Cumulative soybean sales stand at 24.3% of the USDA forecast for 2011/12 (next) marketing year versus a 5 year average of 18.6%. Meal sales were 268,300 tonnes, which was also well above trade expectations. Oil sales were 21,900 tonnes, which was also above trader expectations. On top of the weekly sales, the USDA confirmed a sale of 174,000 tonnes of US soybeans to China for the 2011/12 season. Soybean oil used for bio-diesel production for June came in at 247.56 million pounds, up from 235.3 million in May and up 162% from last year. Given the large profit margins recently, traders saw the news as disappointing, and it leaves soybean oil stocks a bit higher than expected.
Join the Discussion