Markets

Pre-Opening Soy Complex Market Report

July soybeans were up 4 cents late in the overnight session. Malaysian palm oil futures closed up 0.2% to a 10-day high, and soybean futures at China's Dalian Exchange closed slightly lower. Outside market forces look mostly negative today with weakness in energy markets and a further slide in silver seen as negative. A firm tone to the US dollar and equity market weakness does not help. There were 3 deliveries for May soybeans this morning with 81 meal and 31 oil deliveries. A slightly wetter forecast for the northern plains and an outlook for some rains early this week and heavier rains later this week for the far eastern Corn Belt has traders nervous over the possibility of more planting delays. The central and western areas of the Midwest have a 3-4 day window of planting just ahead, but cold weather may slow down the drying time. For the NOPA report this morning, traders see April crush near 126-128 million bushels, compared with 134.4 million in March. Soybean oil stocks could slip under 3 billion pounds. Strength in the other grain markets helped offset the weakness from outside market forces to hold the market mostly steady overnight. July soybeans closed 13 1/4 cents lower on the session Friday but 3 1/2 cents higher for the week. This was fairly impressive action for the week, as the USDA report on Wednesday added to the old crop ending stocks. New crop ending stocks are already projected at a tight 160 million bushels, so the market is counting on good yield to avoid tightness. The market saw a choppy and volatile trade last week, but funds turned sellers again on Friday, as another jump in the US dollar and sluggish demand factors helped to pressure prices. Ideas that China's demand for soybeans will remain slow were also negative. A positive tilt to outside market forces and talk of a little wetter forecast for the eastern Corn Belt helped to support the market early on Friday. Traders see up to 2 inches of rain for the eastern Corn Belt later this week, which might keep progress slow. A turn up in the US dollar and a continued profit taking trend from speculators supported a significant setback from the higher opening and a move to sharply lower on the day. Traders see soybean planted area near 20-30% complete as of Sunday, May 15th as compared with 7% last week and 37% last year. The 10-year average for this time of the year is 34%. News of China buying large quantities of Argentina soybean oil failed to provide much support. The slowdown in the crush has helped support meal basis levels in recent days. The Commitments of Traders reports as of May 10th for soybeans showed non-commercial traders were net long 85,232 contracts, a decrease of 16,781 contracts for the week, and the aggressive long liquidation selling trend of the funds is seen as a short-term negative force. Trend following fund traders (non-commercials without index funds) are net long just 56,495 contracts from over 150,000 earlier this year. Commodity index traders held a net long position of 165,015 contracts, down 2,147. For meal, non-commercial and nonreportable traders combined held a net long position of 31,627 contracts, down 2,913 for the week. For soybean oil, non-commercial traders were net long 33,975 contracts, a decrease of 20,738 contracts for the week. Commodity index traders held a net long position of 90,270 contracts, down 787.

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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