Price action: May soybean futures fell 7 1/4 cents to $16.60 1/2 after tumbling from a morning high at $16.88 1/2. The most-active contract still gained 76 cents this week. November soybeans fell 3 3/4 cents to $14.50 1/4. May soymeal rose $7.0 to $460.40. May soyoil fell 201 points to 72.80 cents per pound.
5-day outlook: Nearby soybeans initially followed corn and wheat markets higher and gained further support from fresh export business but faded late on profit-taking and indications the market may have established a near-term top. Russia/Ukraine concern likely will keep prices elevated next week, and traders will also watch to see whether China’s five-week buying binge is sustained. USDA’s March 9 Supply and Demand Report is expected to show further reductions in South America’s crop prospects. Argentina’s soybean crop will be lowered to about 43.4 MMT from USDA’s current estimate of 45 MMT, while Brazil’s crop will be slashed to 129 MMT from 134 MMT, based on the Reuters survey.
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30-day outlook: The Russia/Ukraine war is not as large a factor in the soy complex relative to corn and wheat, but Ukraine is the world’s top producer of sunflower seed oil, which competes with soybean oil on global markets. The accelerating South America harvest should provide at least some alternatives for global buyers in the weeks ahead, so the pace of daily USDA sales announcements will be watched closely. Early today, USDA reported daily soybean sales of 106,000 MT for delivery to China during the 2021-22 marketing year, along with daily soybean sales of 108,860 MT to Mexico and 125,000 MT to “unknown destinations,” both for 2021-22. Since Jan. 28, USDA has reported a combined 5.827 MMT of soybean sales to China or unknown destinations, a more than eight-fold increase from the pace over the previous month. USDA’s March 31 Prospective Plantings is expected to show an increase in soybean acres.
90-day outlook: U.S. farmers were widely expected to increase soybean acres over corn this year, through the Russia/Ukraine war casts uncertainty over the planting outlook. Corn’s rally this week shifted price relationships in favor of more corn acres. The corn-soybean ratio ended the week at 2.3, the lowest since late January and suggesting the market is trying to “buy” more corn ground. We previously expected soybean plantings to increase 1.2 million acres from last year to 88.4 million acres, though our acreage survey will give us a better indication of planting intentions.
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