November soybeans are trading 11 cents higher near 7:30 am cst. The new crop contract traded sharply higher overnight as demand for US soybeans remains steady against a declining US supply outlook. Soybean meal and oil both traded higher as well. Malaysian Palm oil markets were closed for holiday today. Chinese stocks were weaker overnight, as property stocks in Shanghai were weaker, off fears that the Chinese government might step back in to dampen recent gains in that critical investment sector. French and German shares were higher overnight, but shares seemed to run out of upside fuel at some critical technical levels on the charts and that prompted some to suggest that the European markets are once again in need of fresh decisive action from ECB officials. US stocks managed to start out on a positive track today and the focus of the US trade this week, will be some upcoming housing numbers and a week ending US Durable goods report. Soybeans continue trade with a positive tilt as demand doesn't seem to want to back-off at current price levels. The outlook for the US soybean supply is variable with most traders estimating yield between 36-38 bushels per acre against the current USDA forecast of 36.1. The recent rainfall is offering hope to some areas of the Midwest but it has been mostly restricted to the northern US and eastern Corn Belt until last week. Any rainfall this week is expected to be.25-1 inch but only 20% of the Midwest could see coverage. Showers will be followed up with dry conditions but the cool temperatures should help. Drier than normal soil moisture conditions in the central and western Midwest are expected to see no relief this week which will keep soybeans under stress and could affect pod filling. This afternoon's Crop Condition ratings are expected to improve slightly as a result of the rainfall seen in the central Midwest last week.
Cash soybean markets were mixed to end the week with the Mississippi River basis steady to slightly lower. Basis near Burns Harbor, Indiana gained last week as commercial traders attempt to get cash soybeans moving in the market. Soybean harvest has begun in Louisiana and Mississippi. The harvest pace will pick up in the Delta throughout this week but central Midwest harvest won't begin for another 3-4 weeks if weather cooperates. China was reportedly in the market last week and it is rumored that the US and Argentina sold soybean cargos for September and October-November.
A closely followed crop scout will kick off their week-long tour today. The tour received record attendance this year and industry experts will be attending. The market action today and the rest of this week will be sensitive to yield and condition reports out of the field. The market expects highly variable reports which should add to the volatile, two sided trade this week.
The Commitments of Traders reports as of August 14th for soybeans showed Non-Commercial and Non-Reportable combined traders held a net long position of 227,194 contracts, up 1,006 for the week. Trend-Following Funds (Non-Commercial Traders net of Index Funds) now hold a net long of 192,517 contracts which is up 3,532 contracts from the week prior. For meal, Non-Commercial traders were net long 77,346 contracts, an increase of 7,155 contracts for the week and the buying trend is a short-term positive force. For oil, Non-Commercial traders were net long 10,008 contracts, an increase of 11,719 contracts which represents a change from a net short to net long position week over week and the buying trend is supportive.
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