May soybeans were trading 14 1/2 cents higher late in the overnight session. China futures were down 0.2% overnight. Palm oil futures in Malaysia closed down 0.1% overnight. Equity markets in Australia and Hong Kong were higher overnight, with rumors that the PBOC might be set to provide some liquidity to its economy. Asian investors really didn't have that much time to react to the Spanish auction results. European markets were higher to start today on the mostly acceptable Spanish auction results but the markets were also falling back from those initial highs into the US opening. Early in the US trade today, share prices were mostly higher, with the markets generally relieved with the European debt auction results. The US economic report slate today is very active, with initial and ongoing claims, existing home sales, leading indictors and a Philly Fed manufacturing result. Expectations call for a decline in claims, a slight improvement in existing home sales and a decline in the Philly numbers. The US earnings parade will also continue with the general influence of the earnings coming in as a positive for most physical commodity markets. Relief that the European debt situation may not drag down the global economy and rumors of potential easing action in China were seen as bullish factors overnight to help drive the market higher. May and July soybeans closed 18 cents lower on the session yesterday as fund traders were noted as active with lows of the day posted in early trade. The firm US dollar and weakness in energy and metal markets was enough to spark a long liquidation selling trend. Continued talk that the market is overbought, record open interest and talk that China may soon slow their import buying helped to spark the selling. While traditional technical indicators such as RSI have corrected from overbought readings to nearly oversold readings, and the market is down as much as 65 cents from the April 3rd peak, open interest has seen a steady uptrend to reach another new record high of 811,832 contracts from 551,998 contracts on March 1st. Private exporters reported a sale of 120,000 tonnes of US soybeans to China for the 2012/13 season. The early break pushed the market to the lowest level since March 30th. The USDA attache in India sees oilseed production for the 2012/13 season up 3% to 35.6 million tonnes. The weekly broiler report showed eggs set at down 4.7% from last year and this has been a constant for the past several weeks which suggests sluggish domestic meal demand into the summer. Israel bought 22,000 tonnes of US corn and 20,000 tonnes of US meal. Traders see soybean weekly export sales, for release before the opening, near 975,000 tonnes as compared with 636,400 tonnes last week. Xinhua news agency reports that the Heilongjiang province is facing the worst drought in a decade. This province accounts for 40% of China soybean production.
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