Price action: November soybeans rose 28 cents to $14.68 1/2, off 20 1/2 cents from today’s high but still the highest closing price since June 29. November futures soared $1.52 3/4 for the week, or 11.7%, the largest weekly percentage gain since August 1999. September soymeal fell 70 cents to $442.40 and September soyoil rose 250 points to 66.50 cents.
5-day outlook: Soybean futures rose for a sixth consecutive session on escalating concerns heat and dryness during the first half of August will pinch yield potential. Weather updates over the weekend and early next week will be key price drivers. Much of the Midwest is expected to be hotter than normal through the first half of August, with limited rainfall chances in many areas. The “most important part” of the next 10 days is the “lack of significant moisture advertised by most of the computer forecast models from Iowa, northwestern Illinois and northern Missouri northwestward into the northern Plains,” World Weather said. Late selling pressure in soybeans may have reflected updated forecasts suggesting greater rain odds. The GFS model was wetter for the Midwest Aug. 8-10, World Weather said around midday, but added “the latest run is likely too wet…. the bottom line to the two-week outlook is unchanged for the major crop growing areas in the U.S.”
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30-day outlook: August weather will be the primary price driver over the month ahead, along with USDA’s Aug. 12 Crop Production Report. There’s potential for more price upside if new-crop exports remain strong and the soymeal and soyoil markets extend recent rallies. Outside markets such as crude oil and U.S. stocks appear to reflect easing recession fears and/or beliefs the Federal Reserve will eventually get inflation under control. That may spark a return to a “risk-on” mentality that prompts speculators to expand long exposure in commodities.
90-day outlook: Longer-term influencers include with late-summer weather, export demand and outside markets. Near-term export numbers have been trending bearish. USDA on Thursday reported net weekly soybean sales reductions of 58,600 MT for 2021-22, marking the fourth week in the past five with net old-crop sales reductions. The longer-term picture looks more bullish. Early today, USDA reported daily soybean sales of 132,000 MT to “unknown destinations” for 2022-23. That marked the first daily soybean sale announcement since July 20 and just the second since June 15. New-crop soybean sales commitments of nearly 14.9 MMT are up 46% from the same period last year.
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