Market Report for Januari 7 - 2011 Pre-Opening Soy Complex

Market Report for Januari 7 - 2011 Pre-Opening Soy Complex : March soybeans were down 7 1/2 cents late in the overnight session. Palm oil futures in Malaysia were down 2.3% overnight and China futures were down 1.2%. There were no deliveries against the January soybeans this morning but 88 deliveries for meal and 2,075 oil deliveries. Outside market forces look bearish this morning as the dollar continues to climb and commodity traders see the possibility that China continued to push tightening policy on the market in an attempt to fight inflation.

Fears of index fund trader rebalancing and a general sense that the news that global food prices hit a record high in December will spark anti-inflationary policies from many key consumers such as China and India helped to spark more aggressive selling across a wide range of commodity markets recently

In addition, the sharp run-up in the US dollar led by concerns for more sovereign debt issues in Europe has many investors moving to the sidelines for higher risk trades. Policy tightening concerns from China helped pressure grain markets overnight, with some traders second-guessing just how long China will continue to be an aggressive buyer of soybeans. China officials indicated overnight that 92% of the 98,338 tonnes of rapeseed oil offered from state reserves were sold.

Fund traders were aggressive sellers in many commodity markets yesterday, and the soybean complex was no exception. Weakness in energy markets and aggressive selling in sugar and other grain markets may have helped spark speculative long liquidation selling. Talk of better weather in Argentina in the forecast plus the weaker US dollar and fears of index fund selling helped to drive the market lower. Net weekly export sales for soybeans came in at 489,300 metric tonnes for the current marketing year and 63,400 for the next marketing year for a total of 552,700. China old crop sales exceeded the net total for the week, but there was a cancellation of 215,300 tonnes to an unknown destination.

As of December 30th, cumulative soybean sales stand at 81.8% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 65.9%. Sales of 225,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales were 29,000 tonnes, which pushed cumulative sales to 57.3% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 44.4%. Sales of 91,000 metric tonnes are needed each week to reach the USDA forecast.

Oil sales were 13,000 metric tonnes. Cumulative sales have reached 78.7% of the USDA forecast for 2010/11 marketing year versus a 5 year average of 34.0%. Sales of 7,000 metric tonnes are needed each week to reach the USDA forecast. Some rains this week have eased stress on Argentine crops, and the weekend could bring some scattered to widely scattered rains. But drier weather looks to emerge for next week. Weather models have been flip-flopping on extended forecast, but it could be hotter and drier. For the latest updates PRESS CTR + D or visit Stock Market news Today

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