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NEAR-TERM MARKET FUNDAMENTALS: The USDA’s Supply/Demand and world production reports are due out today and traders say that this should be the major influence on prices to start the day session along with the stock market. Trade expectations are for a drop in US ending stocks from last month’s 210 million bushels. China imported 3.27 million tonnes in February, up 62% from last year. Pakistan oilseed imports are expected to reach near 1 million tonnes this year from 500,000 tonnes last year. Recent estimates of soybean production in Brazil have been lowered marginally by major forecasters while the Argentine crop has been bumped higher by timely rains in February and this could be factor on today’s reports. Malaysia’s official crop agency said today that stocks of palm oil fell 15% in February versus January and this took stocks to a 16-month low. This came on a 10.7% drop in output. Exports were also lower, but by a smaller amount. This was considered a bullish report, but prices still ended lower in Kuala Lumpur. A senior grain official in China said today that the government will not buy any further grain from last year’s harvest. This would include soybeans, corn and rice. The official added that about 70% of the purchase plan for the 2008 crop has been completed. Continued rain in harvest areas of Brazil may cause further delays this week. Deliveries against the March contracts were zero in soybeans with the total for the month also at zero. Meal deliveries were also at zero again today with the total for the month still at 6 contracts. Soy oil deliveries were 1,481 with the total now at 16,281 contracts.

CASH NEWS AND TENDERS: Egypt is in the market for 20,000 to 25,000 tonnes of soy oil and 6,000 to 9,000 tonnes sunflower oil. Taiwan is in the market for 40,000 to 60,000 tonnes of soybeans. Iran may purchase 20,000 to 30,000 tonnes of soy oil and the same quantity of sun oil. Bangladesh is tendering for 5,000 tonnes of soy oil.

WEATHER: Showers and thunderstorms are still in the forecast for northern and north central growing areas in Brazil with locally heavier amounts that could cause further harvest delays. Cooler temperatures and showers in the south should continue to benefit crops there. Argentina is expected to be dry and warmer this week.

TODAY’S GUIDANCE: The market is waiting to get the Supply and Demand Reports out of the way today. They are likely to be non-events in the case of 2008/09 US numbers, with the possible exception of a bullish upward adjustment in exports that leaves ending stocks well below 200 million bushels. A more likely source of a surprise is in Brazilian or Argentine soybean production where there are still significant questions about the effects of changes in crop weather during February. If the reports do not push the market sharply lower in the early going, look for further gains in soybeans and meal. For now, these gains may be confined to 905 to 910 in the May soybean contract and near 290 to 295 in May meal. We are raising support in May soybeans to 867 to 868 1/2 with the next support at 853 1/2 to 857. Resistance is at 896. Light support is at 817 in the November contract is at 805 to 810 with limited resistance still coming in near 853 to 855.

This content originated from – The Hightower Report.