November soybeans were trading up 2 3/4 cents late in the overnight session. Malaysian palm futures closed up for the third day in a row and up 0.7% on the day, and China's soybean futures closed 1% 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 modest gains later on today. The US Dollar is weaker against most major currencies this morning, although posting a substantial gain versus the Swiss Franc. France, Italy, Spain and Belgium have each instituted short selling bans on financial stocks since yesterday's close. The People's Bank of China said that they will use interest rates and the Chinese Yuan to guide that nation's monetary policy. French GDP during the second quarter was unchanged, lower than market forecasts. French CPI during July was up 2.1% year-on-year, smaller than expectations. Euro zone Industrial Production during July was down 0.7%, weaker than projections. Major US economic numbers to be released this morning include July Retail Sales at 7:30 AM, a private survey of US Consumer Sentiment during August just before 9:00 AM, and June Business Inventories at 9:00 AM. In addition, Fed Regional President Dudley will give a speech during the session. Meal deliveries against the August contract this morning came in at 73 contracts, bringing the total for the month to 774. Oil deliveries came in at 36, bringing that total for the month to 3,774. There are still no deliveries for August soybeans. The market inched higher overnight, led by a more positive tilt to outside markets with a weaker US dollar and firm equity markets helping to support. With a larger than expected drop in soybean yield in yesterday's report, traders see weather in the next few weeks as important. Many traders see the yield estimate as too low "if" good rain and a lack of stress are seen across the heart of the Corn Belt ahead. Weather models were fairly threatening a few days ago, but recent runs are showing that the heat in the southern plains not moving up into the Midwest, and this may be seen as a negative force. In addition, the "scattered rains" forecast for the dry central Illinois region for the weekend has morphed into a forecast for widespread coverage of 1 inch or more. If the improved weather forecast is verified, traders will begin to question the sharp drop in yield. The weather outlook along with talk of increased selling from Brazilian producers yesterday may have been a factor limiting the advance. Taiwan passed on a tender to buy 23,000 tonnes of US corn and 12,000 tonnes of US soybeans overnight. November soybeans closed sharply higher on the session yesterday but near 23 cents off of the early highs. On top of the bullish USDA news, the market found additional support from a strong stock market and higher energy markets. Traders saw the weather outlook into later August come in not nearly as hot as expected. This may help the crop avoid stress during a key reproductive period. The USDA Supply/Demand report was considered bullish, with soybean production pegged at just 3.056 billion bushels, which was down 131 million bushels from trade expectations and down 169 million from last month. Average yield came in at 41.4 bushels per acre, down a full 2 bushels per acre from last month. Planted acreage was revised down by 200,000 acres and harvested down by 500,000. Beginning stocks came in 30 million bushels higher than last month. The USDA lowered crush demand by 20 million bushels and export demand by 95 million bushels to get to the 2011/12 ending stocks of just 155 million bushels, which was down from 175 million estimated last month and 230 million this year. World ending stocks for the 2010/11 season came in at a record-high 68.42 million tonnes, which was well above expectations. However, world ending stocks for the 2011/12 season were pegged at just 60.95 million tonnes, down from 61.97 million last month. Weekly export sales for soybeans came in at 588,400 tonnes. Cumulative sales stand at 26.9% of the USDA forecast for 2011/2012 (next) marketing year versus a 5 year average of 21.4%. Sales of 495,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 97,000 tonnes. Oil sales came in at 6,900 metric tonnes. Soybean oil ending stocks for the 2011/12 season came in at 1.971 billion pounds, compared with 2.206 billion from last month's estimate, 2.816 billion for the 2010/11 season and 3.406 billion last year.
Join the Discussion