November Soybeans ended the week on the defensive closing down 17 ¾ after a big rally week. For the week beans gained 12 ¼ cents despite the break on Friday. November beans traded to a contract high of $10.17 ½ which was only the 2nd time in history that the November soybean contract has traded above $ 10.00. Traders indicate that it is to be expected for beans to struggle with a $10.00 price and caution traders to be too bearish despite Fridays break. The quarterly stocks report issued Friday shows soybeans stocks at 573 mil. bu compared to 449 last year, near analysts expectations. Volume on Friday was very heavy, 134,872 beans traded, 59,127 bean oil traded and 60,239 meal traded. Funds were active Friday selling an estimated 5,000 soybeans, 3,000 oil and 3,000 meal.
Today's early calls are for beans to open 3 to 5 higher. With wheat rallying overnight and concerns with dry weather in Brazils northern Mato Grosso region expectations are for this weeks trade to begin higher. Also adding to the bullish opening could be short covering rally likely after the declines on Friday. Technical traders indicate that the market should be well supported and at $9.70 and resistance up to $10.64 in the November contract for now. In other news the USDA confirmed soybean rust has been found in Iowa. The commitment of traders report with options as of September 25th shows funds long 130,396 soybeans up 8207 meal long 64,164 up 393 and oil long 55,674 up 857. The Supplemental report showing index funds soybeans long 159,857 up 2082. China returned 460 mt of soybeans back to the US as they claim the parcel contained live Khapra beetles, one of the most destructive pests for grains, the China Daily said on Saturday. They claimed the cargo also contained other live pets and weeds. Many feel this is a continuation of retaliation for the US complaints of unsafe goods shipped from China, including lead paint in children's toys and toxic ingredients in pet food.
Early Opening Calls: beans 3 to 5 higher, meal $3.00 higher. Bean oil .20 higher.
Top News
-- USDA late on Friday in a press release said they would not allow for penalty free early withdrawl of lands in CRP. Acting Ag Sec did note 2 mln acres will expire on Sept 30 and available for planting
-- Stats Canada will release production figures on Thursday morning. Analysts do expect major changes to crops from its last survey on July 31
-- Russia sees 79 mln mt grain production in current marketing year, also expects exports to be near 12 mln mt, acc. to Russian ag minister
-- 35,000 mt of S American soyoil being sought by Iran in a tender
-- The Commitment of Traders report with Options as of September 25 shows Funds: Soybeans Long 130,396 up 8,207; Meal Long 64,164 up 393; Oil Long 55,674 up 857
-- Malaysian Palm were lower in overnight trade
-- SGS reports that Malaysian palm oil exports in Sept rose 11.9% from August to 1.415 mln mt
-- Malaysian palm oil exports in Sept rose 11.7% from August to 1.381 mln mt, acc. to shipper analyst Intertek
-- eCBOT Vol. 94,741; Pit Vol. 34,640; Open Interest Change: +3,899
-- Weather: Above Normal Temps. Normal to Above Precip. The Corn Belt will see scattered showers and thunderstorms in the north today.
-- Outside markets. Energy complex lower; Gold & Silver: both lower; US $ higher vs Euro & Yen
Cash Markets
--CIF Soybeans up 1 to 3 . Sept. +35 to +40, Oct. +34 to +38, Nov. +48 to +54, Dec. +38 to +45, Jan. +45 to +48, Feb. +30 to ??, Mar. +35 to +37
Nathan T. Smith III
Linn Group
nsmith@linngroup.com
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
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