Pre-Opening Soy Complex Market Report

January soybeans were down 15 1/2 cents late in the overnight session. China futures closed 0.3% lower on the session and down for the 4th session in a row. Palm oil futures in Malaysia were down 1.2%. While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally lower this morning. Early indications are that US equity markets will open with moderate losses. The US Dollar is stronger against most of the major currencies. Chancellor Merkel of Germany stated that Eurobonds would send the completely wrong signal to the markets. Major credit rating agencies have downgraded the sovereign debt of Portugal and Hungary to "junk" status. German GDP during the third quarter was up 0.5%, in-line with expectations. A private survey of German business sentiment was 106.6, higher than projections. Japanese CPI during October was down 0.1% year-on-year, in line with market forecasts. French Consumer Confidence during November was 79, lower than market expectations. There are no major US economic numbers to be released this morning. Outside market forces remained a negative force overnight, as speculators in most commodity markets continued to hold a risk-off attitude. This sparked aggressive selling from fund traders across the board. January soybeans pushed to their lowest level since September of 2010, with a low of 1103. The China National Grains and Oils Information Centre expects China's imports to climb to around 13 million tonnes for the first quarter of 2012, which would be up 18.5% from this year. They see total 2011 imports near 52 million tonnes, down 5.1% from last year. Restocking reserves is one of the reasons for the stronger import pace. Over the past week China has shown interest for December and January imports from the US. There is still talk that Brazil is selling soybeans to China for February and March shipment. January soybeans closed sharply lower on the session Wednesday and pushed to their lowest level since October 7, 2010. Disappointing economic data out of China plus a poor bond auction in Germany helped to spark further selling in commodity markets across the board, and soybeans were no exception. The surge in the US dollar and continued weakness in metal and energy markets added to the negative tone. Traders view the good weather for the start of the growing season in South America and the outlook for another large crop as negative forces for the market. This helped push soybeans to a new 1-year low early Wednesday. January soybeans are down as much as 25.2% off of the late August peak. Energy weakness is helping to pressure soyoil, while meal has also pushed to a 1-year low. A lack of selling from producers has helped support a stronger basis in the US. India is struggling to export meal, and this has helped push crush margins lower. Some traders believe that the jump in wheat feeding around the world means less need for meal to mix in feed rations. Broiler producers in the US saw a slight improvement in the egg set data for the week ending November 19th, to 94% of last year. Chick placements, however, are still at 92% of last year. The data suggests slower meal demand from the poultry industry into early next year.

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