July soybeans were down 3 1/2 cents late in the overnight session. Malaysian palm oil futures closed higher for the third session in a row, up 0.3%, and China soybean futures at the Dalian exchange closed up 0.3%. Outside market forces show a slightly positive tilt overnight with a weak tone to the US dollar and firm metal markets, but weakness in energy prices was an offset. There were no deliveries for May soybeans this morning, but there were 64 contracts of meal and 186 of oil delivered. The results of the USDA Supply/Demand report this morning will likely set the tone for the market today. Traders are looking for old crop ending stocks to be near 155 million bushels, up from 140 million last month, due to a sluggish demand pace out of China. For the first look at the 2011/12 season, traders are expecting the ending stocks forceast to be around 170 million bushels. There is also talk that the world ending stocks could be adjusted higher due to higher than expected production out of South America. Brazilian officials revised their soybean production forecast higher to a record 73.6 million tonnes, which was up from their April estimate of 72.2 million. Thailand feed makers have cancelled 50,000 tonnes of meal imports and may have delayed 40,000 tonnes. There is continued talk that US producers who are behind on planting corn could switch to soybeans, but it may be too early to make this prediction. Producers have a tendency to plant corn into early June, and there is an extra profit incentive to grow corn this season. A surge higher in soybean oil, led by talk of increased demand ahead from the bio-diesel industry plus a jump in wheat prices, helped support solid gains for soybeans early yesterday. However, late selling in corn helped pull the market well off of the highs, with July closing 15 cents off of the peak. Ideas that corn producers might get the weather they need to plant most of their intended acres, especially in the western Corn Belt, helped support the new crop November soybeans, as this would mean "less" shifting from other crops into soybeans. Nearly 3 million acres of farmland are thought to have been lost across three states along the Mississippi due to flooding. The market saw early strong gains from some concerns for late plantings and from continued strong gains in wheat. The US soybean crop is 7% planted as of Sunday but is still down from 28% last year and a 10-year average of 19%.
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