November soybeans were up 14 1/2 cents late in the overnight session. Malaysian palm futures closed up 1.9%, and China soybean futures closed 0.3% higher. While equity markets in Asia were mixed during the overnight session, stock indices in Europe were generally stronger this morning. Early indications are that US equity markets will open with substantial gains. The US Dollar was weaker against most major currencies early this morning but firmed to move higher on the day. This could temper the equity market recovery. There are reports that China may have reduced their target for public home construction next year by 20%. Turkey announced a ban on short-selling stocks, joining Greece and South Korea to become the third major market to do that this week. Japanese Machinery Orders during June were up 7.7%, higher than market expectations. The final leg of the Treasury's refunding, the 30-Year Bond auction, will have results announced at 12:00 PM. Major US economic numbers to be released this morning include the June International Trade Balance and Weekly Jobless Claims at 7:30 AM. Meal deliveries against the August contract this morning came in at 27 contracts with oil deliveries at 108. There are still no deliveries for August soybeans. The results of the USDA Crop Production and Supply/Demand reports will set the tone for theb grain markets today. Traders seem to be most interested in corn yield and production and also the special survey of planted acreage for the northern plains states. Traders believe that the heat in July will cause the USDA to lower their yield estimate to push soybean production down about 35-40 million bushels from the July USDA estimate of 3.225 billion bushels. However, beginning stocks may be adjusted higher due to sluggish demand and hefty world supply, so the entire 35-40 million may not be pulled off of new crop ending stocks, especially if new crop demand numbers are adjusted lower. Ending stocks for the 2011/12 season are expected to be down 5-10 million bushels from 175 million posted last month. Traders believe that world ending stocks for the 2010/11 season could be adjusted higher by more than 1/2 million tonnes from the previous (and all-time record high) USDA July estimate of 65.88 million tonnes. Traders believe September 1st soybean stocks in South America are at a record high. Weather looks a bit more threatening for the August 19th to 24th time frame, as hot and dry weather expands from the plains up into the western Corn Belt. November soybeans saw choppy and two-sided trade yesterday but managed a late buying spree to close slightly higher on the day. A jump in other commodity markets such as gold and energy helped to support the soybean market early, but European financial market fears emerged to break the stock market, and long liquidation selling emerged to pressure. Meal found support from the meal/oil spreading and from higher corn values. In addition, South Korea bought 110,000 tonnes of meal from South America. Traders noted a strong rally in the Brazil soybean basis in the past few days.
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