Pre-Opening Soy Complex Market Report

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May soybeans were trading down 1 cent late in the overnight session. China futures closed 0.3% higher overnight and palm oil futures in Malaysia closed 0.1% higher overnight. Outside forces look slightly positive today with further weakness in the US dollar and a firm tone to energy markets. Weakness in the other grains and a higher than expected USDA Outlook Forum ending stocks estimate helped to pressure the market a bit overnight. Outside forces are stronger, China has been an active buyer recently with talk of some switching of cargoes from South America and rain amounts in southern Brazil have been disappointing this week but these positive forces failed to support. At the USDA Outlook Conference, the USDA raised their planted acreage by 1 million acres from their baseline projection from a few weeks ago to 75 million, unchanged from last year. This was seen as a negative development for new crop soybeans compared with expectations. Ending stocks and a breakdown of demand indicators for the 2012/13 season were released this morning. In the baseline projections, done before the South America drought, the USDA had pegged ending stocks for the 2012/13 season at 209 million bushels and with increased demand for US soybeans due to lower South America production, traders were hoping to see ending stocks under 200 million. However, ending stocks were pegged at 205 million bushels even with a jump to 1.55 billion bushels for export as compared with 1.275 billion this season. May soybeans closed slightly higher on the session yesterday and experienced the highest close since October 14th as fund traders were noted as active buyers. More talk of smaller South American crops plus dryness concerns for southern Brazil helped to support the market. A positive tilt to outside market forces (weaker $, higher gold and equity trade) helped to support the market early as traders were still nervous with lighter than expected rains in the forecast for southern Brazil. The Rosario grains Exchange in Argentina pegged the soybean crop at just 44.5 million tonnes as compared with their estimate one month ago at 49.5 million tonnes. The USDA lowered their estimate in the February update by 2 1/2 million tonnes to 48.0 million. Vietnam seeks 100,000 tonnes of optional origin meal. Bangladesh seeks 4,000 tonnes of optional origin soybean oil. With some adverse weather hitting India's winter-sown oilseed crops, traders see India edible oil imports on the rise over the next few months. Traders see weekly export sales this morning near 2.0 to 3.9 million tonnes from 614,700 last week. Meal sales are expected near 75,000-150,000 and oil sales near 15,000-30,000.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

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