November soybeans are trading 8 cents lower near 7:30 am cst. Soybean meal and oil are trading lower as well. Malaysian Palm Oil prices fell overnight and posted their worst weekly performance since late July as traders expect rising stockpiles. There were no soybean or soybean meal deliveries overnight but 703 for oil to bring the total for the month to 5,944. Asian equity markets were sharply higher during overnight trading, with the Nikkei up 2.20% and the Shanghai A Share index up 3.70%. European stock markets have posted moderate gains this morning, with Italian equities up by more than 2%. US stock indices are higher, while the Dollar is posting moderate losses. China approved plans for spending 1 trillion Yuan to improve their infrastructure. German Industrial Production during July was up 1.3%, higher than market expectations. UK Industrial Production during July was up 2.9%, higher than market forecasts. US economic data this morning includes August Non-Farm Payrolls, August Private Payrolls, and the August Unemployment Rate.
November soybeans continue to be plagued with a profit taking trend, as bulls become increasingly nervous that the recent rainfall in the eastern Corn Belt has dramatically help soybean yields. The overextended long position by some in the market, calendar spread selling, and weaker domestic basis have all been limiting factors to price gains. Slight support is being seen from a falling US Dollar and rising corn and wheat prices; however any gains this week have been met with selling from speculators.
Ideas that farmers will sell soybeans right off the combine and that harvest will move along at record pace have pressured the November contract since last week. The market is beginning to place more bullish focus on the January and March contracts as demand shifts to those periods and new crop harvest will be complete by them. Spot basis for soybeans was steady to lower yesterday around the US Midwest and soybean bids in northern Indiana fell by 17 cents. Decatur, IL processors are bidding 30 cents over the November contract which was unchanged from the day prior. Weak soybean meal basis has pressured margins for some areas of the Midwest which has added to the domestic soybean basis.
Exports remain the supportive feature in the soybean market but there are rumors that China has increased rapeseed imports to cover the deficit in soybeans over the next couple of months. This is speculation at this point but if true, could add to the nearby resistance on price gains. The trade expects soybean export sales to be reported near 700,000 tonnes, soybean oil near 35,000 and soybean meal near 150,000.
The weather forecast calls for scattered showers in the central Midwest into the weekend and storm systems are pushing across northwest Nebraska, northern Illinois, and Wisconsin this morning. The longer term outlook calls for a return to warmer and drier conditions which should benefit row crop harvest. Above normal temperatures could still be detrimental to late planted soybeans for some areas.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.