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NEAR-TERM MARKET FUNDAMENTALS: A weak US dollar and news that China inked deals for 3.07 million tonnes of US soybeans worth near $1.8 billion at the trade delegation meetings in Chicago failed to provide much support overnight. Traders see improving weather and crop conditions in Argentina and there is continued talk of the overbought technical condition of the market. Traders see recent rains in Argentina as beneficial and after 4-5 days of hot and dry weather, there is a cold front next week which could bring two days of showers and cooler weather which traders believe could be very beneficial to crop conditions. Traders remain concerned that China will slow their economy to fight inflation. China plans to continue to offer state reserves at auctions next week but will also be buying soybeans from producers to re-build state reserves. China plans to offer 300,000 tonnes of soybeans for auction on Tuesday. The corn market saw a strong recovery to close sharply higher on the session yesterday and the late buying in corn helped support a slightly higher close in old crop soybeans. November soybeans managed to recover from early losses to trade moderately higher on the day and to post a new high for the move. Traders see the “need” for November soybeans to move higher now in an effort to entice producers to shift to plant more soybeans. Cash markets are steady as recent weakness in futures has slowed producer selling. Traders see soybean weekly export sales for release before the opening near 600,000 tonnes, meal sales near 95,000 and oil sales of near 60,000 tonnes. Old crop oil sales need to average just 6,600 tonnes each week to reach the USDA projection for the year. Argentina truck drivers and port workers near the main grain terminal at Rosario plan to go on strike from next Wednesday to protest pay. This could disrupt to flow of oil and meal on the world market.
TODAY’S GUIDANCE: Private forecasters will be releasing planted area estimates today and if there is a continue guess that producers will not significantly raise soybean plantings, November soybeans still have time to “buy” the acres. As a result, while the Argentina weather looks bearish, the need for more acres could cause new crop soybeans to lead the rally higher. An extremely tight outlook for US stocks and the Argentina strikes are also supportive forces which should provide support on a shallow correction from the highs.
Soybean Market Commentary – 2011.01.21
by Terry Roggensack on January 21, 2011
Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: A weak US dollar and news that China inked deals for 3.07 million tonnes of US soybeans worth near $1.8 billion at the trade delegation meetings in Chicago failed to provide much support overnight. Traders see improving weather and crop conditions in Argentina and there is continued talk of the overbought technical condition of the market. Traders see recent rains in Argentina as beneficial and after 4-5 days of hot and dry weather, there is a cold front next week which could bring two days of showers and cooler weather which traders believe could be very beneficial to crop conditions. Traders remain concerned that China will slow their economy to fight inflation. China plans to continue to offer state reserves at auctions next week but will also be buying soybeans from producers to re-build state reserves. China plans to offer 300,000 tonnes of soybeans for auction on Tuesday. The corn market saw a strong recovery to close sharply higher on the session yesterday and the late buying in corn helped support a slightly higher close in old crop soybeans. November soybeans managed to recover from early losses to trade moderately higher on the day and to post a new high for the move. Traders see the “need” for November soybeans to move higher now in an effort to entice producers to shift to plant more soybeans. Cash markets are steady as recent weakness in futures has slowed producer selling. Traders see soybean weekly export sales for release before the opening near 600,000 tonnes, meal sales near 95,000 and oil sales of near 60,000 tonnes. Old crop oil sales need to average just 6,600 tonnes each week to reach the USDA projection for the year. Argentina truck drivers and port workers near the main grain terminal at Rosario plan to go on strike from next Wednesday to protest pay. This could disrupt to flow of oil and meal on the world market.
TODAY’S GUIDANCE: Private forecasters will be releasing planted area estimates today and if there is a continue guess that producers will not significantly raise soybean plantings, November soybeans still have time to “buy” the acres. As a result, while the Argentina weather looks bearish, the need for more acres could cause new crop soybeans to lead the rally higher. An extremely tight outlook for US stocks and the Argentina strikes are also supportive forces which should provide support on a shallow correction from the highs.
Tags: Grains, Oil, Soybeans, Soyoil
About Terry Roggensack