Pre-Opening Soy Complex Market Report

November soybeans were trading up 10 1/4 cents late in the overnight session. Malaysian palm futures closed up for the 4th day in a row and up 1.8% on the day, and Chinese soybean futures closed 1% higher. With equity markets in Asia and Europe generally stronger during the overnight session, early indications are that US equity markets will open with moderate gains. The US Dollar is weaker against most major currencies this morning, although posting a substantial gain versus the Swiss Franc. A German government spokesman said that the creation of "Euro" bonds will not be on the agenda at this week's meeting between German Chancellor Merkel and French President Sarkozy. Japanese GDP during the second quarter was down 0.3%, a smaller decline than market forecasts. Major US economic numbers to be released this morning include the NY Fed's Empire State Manufacturing survey at 7:30 AM, the Treasury Dept's International Capital Flows report at 8:00 AM, and a private survey of the US Housing Market during August at 9:00 AM. In addition, Fed Regional President Lockhart will give a speech during the session. Meal deliveries against the August contract this morning came in at 43 contracts bringing the total for the month to 817. Oil deliveries came in at 31 bringing the total for the month to 3,805. For the first time this month, there were 6 soybean contracts delivered against the August soybeans. Weekend rains were scattered in central and east central Illinois and missed much of western Illinois and eastern Iowa, which is a drier than normal region. This, along with a positive tilt to outside market forces helped to support the bounce overnight. Traders see the jump in cash basis levels in Brazil as a reason to suspect that old crop supply is tightening. Many traders believe that the damage was done for corn in July but that good weather in August could support an improving crop outlook. Traders see a mixed view on weekly crop progress reports this afternoon, with most looking for steady to down 1% in the good to excellent category. Traders see the NOPA monthly crush for July, for release this morning, coming in near 118.5 million bushels, compared with the June crush of 117.7 million. Egypt is tendering for 20,000-30,000 tonnes of soybean oil. The Commitments of Traders reports as of August 9th showed non-commercial traders were net long 59,771 contracts of soybeans, a decrease of 43,872 contracts for the week. The long liquidation selling trend is seen as a short-term negative force. Non-commercial and nonreportable traders combined held a net long position of 32,373 contracts, down a whopping 53,095 contracts for the week. Commodity index traders held a net long position of 160,551 contracts, down 8,132. In meal, non-commercial traders were net long 23,609 contracts, a decrease of 6,613 contracts in just one week. Non-commercial and nonreportable traders combined held a net long position of 30,556 contracts, down 12,863. For oil, non-commercial traders were net short 3,472 contracts after selling a net 31,004 contracts for the week. The shift from a net long to net short position is seen as a negative development. Commodity index traders held a net long of 77,075 contracts, down 5,242. November soybeans closed 3 cents higher on Friday but not enough to avoid a loss of 1 1/4 cents for the week. News from the Chinese National Grains and Oils Information Centre that soybean production should be 13.5 million tonnes this year, down 10.5% from last year, helped to support. In addition, China will add 12.3 million tonnes of crushing capacity this year from last year. December meal closed slightly lower on Friday to close slightly lower on the week, while oil closed slightly higher on the session but down moderately for the week. India vegetable oil imports in July were 913,179 tonnes, up 5.9% from June and up for the fourth month in a row. The short-term weather outlook remains non-threatening in terms of temperature, but areas of Iowa and Illinois need more rain. In addition, the longer-term weather models are showing a cool outlook but still relatively light rains for the drier areas surrounding central Illinois. Just last week, it looked like weather was turning harsh for the second half of August, and now there is the possibility of nearly ideal weather in the Midwest for this sensitive time period "if" areas of eastern Iowa and central Illinois can get a bit more rain. Since 1975, there have been 19 years in which the USDA lowered their production forecast for the August crop production report. In 12 of these 19 years, there was a further adjustment lower in the production for the September report.

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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