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Pre-Opening Soy Complex Market Report

July soybeans were down 3 cents late in the overnight session. Malaysia palm oil futures closed down 1.1% after first trading as much as 2.5% lower, a new six-month low. Chinese soybean futures at the Dalian exchange closed down 1.3%. The financial markets are quiet, but metals and energy markets remain under pressure, which is seen as a negative force for grains. There were no deliveries for May soybeans this morning, and there were 9 contracts of meal delivered and 287 oil. With much of the price break in energy and metals occurring after the grain markets closed yesterday, soybeans saw follow-through selling and weaker prices overnight. the July contract was down more than 15 cents at one point before making a recovery bounce late in the session. Traders remain concerned about weak demand from China and high stocks at ports there. Yesterday's weekly export sales did not show any sales to China for the first time in a while. Traders are also concerned that soybean exports from the US will remain slow. There are also some concerns regarding US soybean sales on the books to China that have not yet been shipped. There are still 1.946 million tonnes of soybean sales to China for the old crop season that have not been shipped, and this compares with only 516,900 tonnes unshipped last year at this time. Weekly export sales for soybeans came in at 21,000 metric tonnes, close to the marketing year low of 20,900 tonnes on February 3rd. Sales of 106,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 78,700 metric tonnes, which pushed cumulative sales to 80.8% of the forecast for 2010/11 (current) marketing year versus a 5 year average of 71.8% for this time of uear. Sales of 72,000 tonnes are needed each week to reach the USDA forecast. Oil sales came in at 3,900 metric tonnes, compared with 11,000 tonnes needed each week to reach the USDA forecast. In the Census Oil Stocks report yesterday, consumption of soybean oil used for bio-diesel production for the month of March jumped to 176.3 million pounds, up 32% from last year and up from 112.6 million in February. It represented 11% of the total consumption for the month. This is the highest level of bean oil consumption for biodiesel since December 2009. This was helped by the reinstatement of the $1.00 per gallon blenders' credit for 2011. In order to reach the USDA projection of 2.7 billion pounds of bean oil usage for biodiesel for the 2010/11 season, which ends in September, monthly usage will need to surge to average 345.8 million pounds. India's oilmeal exports reached 501,497 tonnes for April from 204,346 tonnes last year. For the 2010/11 season ending in March, India meal exports totaled 5.1 million tonnes from 3.2 million the previous year. Spec selling and the surging US dollar selling helped to drive the market sharply lower yesterday. Cold and wet weather in Canada has pulled planting progress 2-3 weeks behind normal. Traders see increased rain in the forecast for that region as a supportive force, as it may keep canola producers from planting. There is talk in cash market circles that producers in the Dakotas are already exchanging seed corn for soybeans, and this is helping to pressure the November soybean futures, which are already down as much as 94 3/4 cents off of Monday's highs. For the March 31st Canadian Grain Stocks Report today, traders see canola stocks near 5.3 million tonnes, down 16% from last year.

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


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

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