November soybeans are trading 29 cents lower near 7:30 am cst. Soybean meal and oil are also trading sharply lower. The Malaysian Palm Oil market was closed for holiday but it is being reported that Malaysian palm oil exports for September 1-15 rose by 12.1% to 680,112 tonnes from 606,449 tonnes for the same period in August. China soybeans were down 1.3% overnight. There were 76 soybean deliveries and 5 soybean meal deliveries after the close Friday. There were also 249 soybean oil deliveries bringing the month-to-date total to 8,295 contracts. Asian equity markets were weaker overnight in the face of escalating tensions between Japan and China. European stock indices were modestly lower as the positive influence of last week's easing news was seemingly missing in the early going today. Apparently fresh reforms in India were unable to spark optimism in that country as a long overdue hike in domestic energy prices last week was seen as an inflationary threat. News that the US might file a trade complaint against China was another factor that might have been contributing to the risk off vibe that was in place in the early Monday US trade action. Today the markets will be presented with a US Empire State Manufacturing report that is generally expected to remain in negative territory.
A disappointing end to Friday's trading session for bulls has left soybeans vulnerable to profit taking and further downside. A slightly negative technical outlook along with early yield reports that have been surprisingly better than expected for some areas of the Corn Belt are adding to the negative tone this morning. Soybean open interest grew by 4,812 contracts last Friday and volume was recorded at 182,689 contracts. Volume has been substantial overnight on the sharply lower trade which is adding to the downside momentum.
The Commitments of Traders reports as of September 11th showed Non-Commercial traders were net long 233,802 soybean contracts, a decrease of 12,911 contracts for the week. Non-Commercial and Non-Reportable combined traders held a net long of 233,596 contracts, down 13,870 contracts for the week and the long liquidation selling trend from speculators is seen as a short-term negative force. These same traders held a net long position of 92,753 contracts in soybean meal which represents a decrease of 10,007 contracts for the week. In soybean oil, Non-Commercial and Non-Reportable combined traders held a net long of 64,959 contracts, down 7,444 contracts in the net long position.
Some market participants expect soybean harvest to be near 10% complete in this afternoon's Harvest Progress report. Weekend showers were confined to the southern Midwest and scattered showers are expected to show up early this week in the central Midwest and Delta. Only minor harvest disruptions and damage are expected. Very cool weather is expected to show up in Minnesota and Wisconsin between Tuesday and Wednesday but the threat of frost is low. South American weather has turned more favorable from Friday with weekend rain seen in areas of Argentina, and the storms managed to hit areas of Mato Grosso which has been trending drier. Southern Brazil continues to see the best rainfall but central and northwestern Brazil look slightly wetter later this week. This will benefit early soybean planting but the pace is expected to be delayed as many farmers wait for more rainfall. Much more rainfall is needed in the short term and the forecast needs to be monitored closely.
Soybean cash bids were steady to slightly weaker on Friday as the harvest pace picks up. New farmer sales were slow as many feel prices will move higher later this winter. Substantial moves in the soybean basis were seen in Indiana where a facility in Lafayette, IN dropped their bids by 20 cents per bushels to 20 cents over the November contract. Basis bids in Decatur, IL were unchanged at 40 cents over the November contract while Burns Harbor, IN was unchanged at 17 cents under. The weaker interior cash markets are seen as a negative factor in the short term.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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