November soybeans were 17 3/4 cents lower late in the overnight session. China futures were down 1.4% overnight on increased concerns for euro-zone debt. Palm oil was also down sharply on global growth concerns tied to debt concerns out of Europe and was down as much as 1.3% overnight in Malaysia. On Monday, palm was down 1.1%. There were 241 deliveries against the September soybean contract this morning. Oil deliveries were 1,173 contracts and meal deliveries came in at 110 contracts for month-to-date at 768. The surge in the US dollar and a trend toward risk aversion from fund traders due to debt crisis in Europe helped to pressure the market overnight. Demand concerns are already significant given the large supply of soybeans in South America ahead of the US harvest. News that China has been buying South America soybeans for November delivery (typically a US time-frame) recently has added to the demand concerns, but yield and production concerns have been the primary bullish force recently. The heat in the southern Midwest and increased concerns that the late season growing conditions could lead to a smaller yield helped spark solid gains on Friday and a surge higher in November soybeans for the week. A surge up in corn and fears that weather is damaging to yield potential lent support. A firm US dollar and a collapse in the US stock market and sharply lower energy markets after the bearish employment news helped to provide some selling pressures on Friday, and the same factors are pressuring the market overnight. In addition, Taiwan bought 58,000 tonnes of Brazilian soybeans in their tender for US or South American soybeans. Traders are looking for another drop in crop conditions for the weekly update this afternoon. Two days of 100 degree temperatures in central Illinois plus weak coverage of less than 1/2 inch of rain may cause further yield concerns for this region, as dry topsoil conditions for late-filling soybean fields could lower yield potential. Some believe that the 2-day heat blast may have ended the growing season and that rain at this stage will not help yield. Some areas of the far southern and eastern Corn Belt received rain from the tropical storm over the long weekend, but the rains did not reach southern Illinois or Indiana. The technical action was considered positive for the week, and rising open interest is also seen as a bullish signal to technical traders. China's Ministry of Commerce believes that August soybean imports were near 3.85 million tonnes, down 28% from July and down from 4.77 million tonnes last year. They also see September imports down to 3.2 million tonnes. The Commitments of Traders reports showed non-commercial traders were net long 183,969 contracts in soybeans, an increase of 54,179 contracts in just one week. Non-commercial and nonreportable traders combined held a net long position of 176,740 contracts, which hit a new record high and was up 59,404 contracts for the week. Commodity index traders held a net long position of 166,008 contracts, up 1,962. For meal, non-commercial traders were net long 47,740 contracts, an increase of 15,298 for the week. Non-commercial and nonreportable traders combined held a net long position of 67,578 contracts, up 18,078. For oil, non-commercial traders were net long 42,937 contracts, up 33,145 for the week. The buying trend is seen as a short-term positive force. Non-commercial and nonreportable traders combined held a net long position of 52,323 contracts, up 42,775 for the week.
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