What Traders are Talking About:
* Soybeans below $15. November soybean futures plunged below the $15 mark for the first time since July 5 in overnight trade. The date when November soybean futures were last below this level is key as futures gapped higher coming out of the Fourth of July holiday -- a historically pivotal date for grain and soy futures -- and proceeded to rally nearly $3 amid escalating drought concerns. But after peaking at $17.89 on Sept. 4, November soybean futures have now erased two months of strong gains and are signaling an even deeper pullback is likely.
The long and short of it: With soybean yields coming in higher than expected, a record South American crop expected and macro-economic headwinds blowing harder again, bears have the clear edge as the sharp pullback from the historic highs continues.
* Chinese soy demand stays strong. China imported 4.97 MMT of soybeans in September, an increase of 12.4% from August and 20.3% higher than year-ago. Through the first nine months of this year, China has imported 44.3 MMT of soybeans -- 17.7% more than year-ago. For all of this year, China is expected to import a record 57 MMT of soybeans, according to state-run China National Grain and Oils Information Center.
The long and short of it: With the Chinese government raising the price on state-owned soybeans to prices that are basically in line with current global prices, Chinese crushers have incentive to import more soybeans -- if they can get their hands on supplies.
* Chinese inflation eases, but exports pick up. Chinese inflation eased further in September, with the consumer price index (CPI) coming in 1.9% above year-ago after a 2% rise in August. Food prices were 2.5% higher, while non-food prices rose 1.7%. The producer price index (PPI) declined by 3.6% compared with year-ago. Trade data showed China's trade surplus widened to $27.7 billion in September as exports rose 9.9% and imports were 2.4% higher than year-ago. The key there is the much-sharper-than-expected rise in exports last month.
The long and short of it: Falling inflation suggests the People's Bank of China has plenty of room to ease monetary policy to boost economic activity. But with the trade data signaling past stimulus measures are taking hold, it could buy the central bank some time before acting again.
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