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Morning markets: soybeans revive as key data looms

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Soybeans managed something of a bounce, despite continued harvest pressure, as traders position themselves ahead of the key US crop report due next week.

Investor sentiment across financial markets was modestly positive – Wall Street shares closed up 2% overnight – although the dollar remained steady ahead of US employment data due later on Friday. Oil ticked higher.

Still, crop traders began increasingly to feel the pull of Tuesday's global supply and demand report from the US Department of Agriculture.

Key numbers are those for US corn and soybean production which will reveal just what damage Washington believes has been caused by the late harvest, and October frost.

Sell-off ahead?

Estimates from private analysis groups this week suggested little, or any, impact on yields.

But that hasn't stopped traders digging deeper into the dynamics of the late harvest to see how it might be affecting prices.

Some say it is fostering a squeeze on some grades, thanks to lower crop quality, while others see even greater delays to supplies as wet drops are dried out.

Meanwhile, Justin Kelly at eHedger, the US broker, said: "Because harvest is late and the moisture is high, we will see a lot of bushels be sold off off the combine rather than stored."

He added that fund behaviour was crucial. "If the funds decide to sell at the same time, we could have a very sharp sell-off."

Tight range

Short-covering, however, appeared to be the order of the day in soybeans on Friday, after a 3% dip in the last session, with investors not wanting to take too many risks ahead of Tuesday's report.

Soybeans for November added 8.5 cents to $9.75 ½ a bushel at 7:50 GMT, with the January contract up 9.5 cents at $9.81 ½ a bushel.

Soybeans have traded in a tight range over the last month or so, which traders may be unwilling to step out of without good reason, such as a surprise number next week, one investor said.

Corn, meanwhile, added 0.25 cents to $3.76 ¾ a bushel for December delivery, with wheat for December unchanged at $5.12 ¼ a bushel.

Poll results

Soybeans' strength helped palm higher in Kuala Lumpur too, again with some technical reluctance to selling.

The benchmark January palm oil contract closed the morning session on the Bursa Malaysia Derivatives Exchange up 16 ringgit at 2,263 ringgit a tonne in thin trading.Crop fundamentals, however, remain a concern. A Reuters poll published during the lunchtime break showed that traders expect key data next week to show a 15.3% rise in stocks to a nine-month high in Malaysia, the world's second biggest palm, producing state


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