The Morning Vibe

11/02/13 -- A glance at the overnight markets shows follow through selling in all the grains/oilseeds, but the soycomplex in particular. This could possibly be attributed to stop-loss selling amongst the weaker longs baulking at stumping up the margin calls on trades that have suddenly gone pear-shaped. China is also on holiday of course.

Will these prices still be available for Chinese buyers when they return from their New Year celebrations? If they are, then they will surely fancy increasing their ownership a bit more? I know I would. And I wouldn't be looking at South America.

In Brazilian ports on Friday there were 141 ships waiting to load corn, soybeans, animal feed or cooking oil - up from 85 a week earlier - say Bloomberg. They are also reporting on a possible port strike beginning next week, quoting the Brazilian National Federation of Ports website.

Meanwhile, the USDA chose to leave US soybean exports unchanged at 36.6 MMT in Friday night's report. The US had already shipped 27.3 MMT of that, with a further 6.9 MMT on the books waiting to go, by the end of January - seven months before the marketing year ends. Those shipments are 42% ahead of year ago levels, and the US eventually shipped 37 MMT then.

Friday's revised US ending stocks number of 125 million bushels (3.4 MMT) for soybeans now represents a stocks to use ratio of only 4.1%. That's incredibly tight, little more than 2 weeks worth of usage. And remember this is dependant on the US NOT exporting any more than 36.6 MMT of soybeans this season, even though they've got 93.4% of that committed already.

Yet here we are with soybean prices currently 50c lower than they were on Thursday night and meal down USD20 since then.

Although that of course is only on paper, I doubt very much whether the cash market will be showing declines of that magnitude today.