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Can Soybeans Rebound Higher?

Export sales, a rebound in the Chinese stock market and positive U.S. news helped lift soybeans early Thursday morning.

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In the overnight session the grains are trading higher with soybeans leading the charge up 14 1/2 cents, corn up 1 1/2 cents and wheat up 3/4 of a penny. The U.S. dollar index is trading 1/2 a percent higher and crude oil is up $1.33. This morning exporters sold 130,000 metric tons of new crop soybeans to unknown destinations making this the third reportable soybean sale this week.

Last night the China market rallied over 5 percent in the last hour of trading after the government took steps to stabilize their stock market before a September 3rd military parade which celebrates the 70th anniversary of the WWII victory over Japan. With China showing strength late in the session soybeans have been able to rebound. Positive news about the U.S. economy was also announced this morning with GDP expanding at a 3.7 percent annual pace up from the 2.3 percent reported last month. Unemployment claims also fell more than expected last week by declining 6,000 to 271,000 for the week.

Export sales this week were disappointing for old crop but new crop beat expectations for corn and soybeans. New crop corn booked 986,600 metric tons of sales compared to expectations which ranged between 450,000-650,000 metric tons. New crop soybeans booked 1,457,400 metric tons of sales which was nearly double last week’s sales and well outside the estimates which ranged from 600,000- 900,000 metric tons. Old crop sales however were disappointing with cancellations of 131,000 metric tons of corn and 131,600 tons of soybeans. Wheat sales beat expectations, booking 572,100 metric tons which is up 68 percent from the previous week.

Ethanol production decreased 13,000 barrels per day this week to 952,000 barrels per day. Despite the decline in production cumulative ethanol production is still running 4.5 percent ahead of last year’s pace. This week’s production was 87,000 barrels per day above the four year moving average for this week and 39,000 barrels per day ahead of 2013/14 production during the same week. Ethanol stocks rose by 67,000 barrels this week to 18.63 million barrels this week.​

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