Soy Complex Futures Post Strong Gains to Start Week
Price action: Soy complex futures posted strong gains to start the week, with January soybeans up 32 cents to $13.36, January meal futures $8.50 higher to $413.20 and January soyoil up 91 points to 51.11 cents.
Fundamental analysis: Soybeans were supported by Brazilian weather concerns as weekend rainfall was less than desired across many of the dry areas of central and northeastern Brazil during the weekend. Forecasts suggest erratic rains will continue for the next week to 10 days, meaning more crop stress is likely for the driest areas. As a result, traders are anticipating more reductions to Brazil’s soybean crop by private crop forecasters.
Additional support came from daily soybean export sales totaling 132,000 MT to unknown destinations for 2023-24, which traders expect was China. With the Brazilian crop shrinking amid drought stress, foreign buyers are purchasing U.S. soybeans, which at a minimum serves as insurance in case of additional Brazilian crop losses.
USDA reported weekly soybean export inspections of 984,410 MT (36.2 million bu.), which were down 188,847 MT from the previous week but within the pre-report range of 700,000 MT to 1.6 MMT. China took shipment of 503,684 MT of U.S. soybeans for the week, or 51.2% of the total.
Technical analysis: January soybeans closed above the 5-, 10-, 40-, 50- and 200-day moving averages today. Near-term resistance is the convergence of the 20- and 100-day moving averages near $13.42, followed by a 50% retracement of the drop from the mid-November high to last week’s low, which is near $13.45 1/2. Near-term support extends from $13.30 3/4 to last week’s low at $12.92.
January meal futures posted corrective gains today but remain in the steep downtrend from the mid-November high. January soyoil futures remain in the broad month-long sideways range outlined by the November low at 48.53 cents and last month’s high at 53.70 cents.
What to do: Marketing game plans and recommendations are available to Pro Farmer members only. View membership options.
Hedgers: Marketing game plans and recommendations are available to Pro Farmer members only. View membership options.
Cash-only marketers: Marketing game plans and recommendations are available to Pro Farmer members only. View membership options.
