Pre-Opening Soy Complex Market Report

November soybeans were up 5 1/4 cents late in the overnight session. China futures were down 0.2% overnight. Palm oil was up 1.4% overnight in Malaysia. There were 259 deliveries against the September soybean contract this morning versus 264 yesterday. Oil deliveries were 1,804 contracts, down from 2,725 yesterday, and meal deliveries came in at 278 contracts for month-to-date of 658. Early indications are that US equity markets will open moderately lower today. The US Dollar is stronger against most of the major currencies this morning, although posting a loss against the Swiss Franc. Euro zone PPI during July was up slightly, while Germany posted some impressive gains in new car registrations for the month of August. UK data from Construction PMI was weaker than the prior month and in turn managed to fall to the lowest levels of 2011. Major US economic numbers to be released this morning include August Non-Farm Payrolls, August Private Payrolls, August Unemployment Rate, August Average Earnings and August Average Workweek at 7:30 AM. Gold and silver are sharply higher. News of a potential sharp drop in corn yields from a private forecast helped support the grain markets overnight, and talk that the sharp sell-off yesterday for soybeans was overdone helped support a bounce. Uncertainty over the tropical storm in the Gulf, where the moisture might develop, plus uncertainty over the price action ahead of the USDA September 12th crop production and supply/demand update may be factors that sparked the long liquidation selling trend from fund traders yesterday. Taiwan tendered for 40,000-60,000 tonnes of US or South America soybeans yesterday and bought 58,000 tonnes from Brazil overnight. Recent sales have gone to South America over US. There are rumors this week that China bought 1.5 million tonnes of soybeans for November delivery from South America, which is normally a time when China switches over to US soybeans. After posting a contract high Wednesday, the market opened moderately lower yesterday and closed sharply lower. Late and aggressive fund selling helped to pressure the market. Brazil exported 3.36 million tonnes of soybeans in August as compared with 2.97 million last year. Increased supply this year for late in their season has allowed for increased competition at a time of the year when South America exports are normally tapering off into the second half of their season. Talk of at least some rain for parts of the central Midwest into the weekend was seen as a potential negative force, but the outlook for the next few weeks looks mostly dry, and there are concerns that crop conditions will continue to deteriorate. Traders look for another 1-2% drop in good/excellent reading for Tuesday night. Weekly export sales for soybeans came in at 593,800 tonnes, which was near the high end of trade expectations. Cumulative soybean sales stand at 30.4% of the USDA forecast for 2011/12 marketing year versus a 5 year average of 28.0%. Sales of 497,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 126,200 tonnes. Oil sales came in at 1,500 tonnes all for old crop, which was well below expectations. Soybean oil used for bio-diesel production in July was reported at a whopping 342.9 million pounds, compared with 293.7 million in June. This was is the third highest monthly total on record. Last year that figure was 103 million.

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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