Soybeans correct lower on Asian weakness

Grains were lower overnight led by soybeans which gave up most of Monday’s strong gains. In outside markets, crude oil fell sharply while equities and the US dollar sat in positive territory to start the trade day.

Yesterday, USDA’s crop condition for the US wheat crop held steady at 58% , unchanged from last week, but slightly better than last year’s reading of 55%. However Plains states of OK/KS/TX saw declines in key HRW wheat conditions. Egypt’s GASC was tendering for an unspecified quantity of wheat.

In Asian markets overnight, China’s Dalian Exchange soy futures were lower and palm oil took a breather from 6 days of advances. US basis levels continue to erode on the rally as end users showed sharp declines on Monday as farmer selling was active.

The CFTC report on Monday showed a continued expansion in fund longs in commodities and in particular funds at 15K contracts to soybean longs.

In global markets, OPEC will meet in Vienna on Wednesday aiming to implement a deal outlined in September to cut output by around 1 million barrels per day from around 33.82 million bpd in October. But key OPEC members appear to disagree over details of the agreement and some analysts have suggested the meeting may fail to reach a deal or produce one that is unworkable.

—Kevin McNew