Pre-Opening Soy Complex Market Report

November soybeans were down 7 1/4 cents late in the overnight session. China futures fell 0.6% overnight, and palm oil futures in Malaysia were up 1.5%. There were 666 deliveries against the September soybean contract this morning, pushing the month-to-date total to 4,572. Oil deliveries were 147 contracts, and there were no meal deliveries for the third day in a row. While equity markets in Asia were mixed during overnight trading, stock indices in Europe were generally higher this morning. Early indications are that US equity markets will open higher. The US Dollar is stronger against most of the major currencies this morning. The head of the European Commission stated his organization would offer proposals for the introduction of Euro Bonds. Two of the largest French banks were downgraded by a major credit rating agency this morning. UK Unemployment during July was 7.9%, in-line with expectations. Euro zone Industrial Production during July was up 1.0%, lower than forecasts. Major US economic numbers to be released this morning include the August Producer Price Index and August Retail Sales at 7:30 AM, July Business Inventories at 9:00 AM, and a private survey of mortgage applications released before the opening. The final leg of the Treasury's refunding, the 30-Year Bond auction, will have results announced at 12:00 PM. The market pushed to a new low for the move overnight and traded at its lowest level since August 22nd, down as much as 87 3/4 cents from the August 31st peak. It will be a few more weeks before harvest is in full swing, but export news is sluggish and the market has seen speculative long liquidation selling since the USDA updates. Even the threat of frost for Minnesota and the Dakotas for Thursday does not appear to be providing much support. As of Sunday, only 15% of the crop was dropping leaves, compared with 27% as the 5-year average. In Minnesota, only 9% was dropping leaves. versus 30% as the 5-year average. This leaves the crop vulnerable to frost if cold weather hits later this week. November soybeans closed slightly lower on the session yesterday and up well off of the early lows. Ideas that crop conditions are improving in Ohio and other parts of the Midwest plus some concerns for a cold weather surge for later this week helped to keep the trade choppy. The weekly Crop Progress report showed that 56% of the US soybean crop was rated good/excellent as of Sunday, unchanged from last week but down from 63% last year at this time. While outside market forces were mostly positive yesterday, (a weak US dollar and firm trade for energy markets), weakness in corn and wheat helped keep the long liquidation selling trend from speculators intact. A more positive tilt to outside markets with a turn up in the US stock market may have helped the market recover from the early lows yesterday. For the NOPA monthly crush report for this morning, traders see August crush just under 120 million bushels, compared with 122.9 in July. In Monday's world supply/demand report, the USDA pegged Argentina's production for 2011/12 at 53 million tonnes, up from 49 million in 2010/11. The Agriculture Secretary in Argentina is forecasting a crop of 52-53 million tonnes.

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.

Other Topics