Price action: March soybean futures rose 22 1/4 cents to $13.35, the contract’s highest settlement since $13.39 1/2 on Aug. 25. March soybean meal rose $7.80 to $398.30 per ton, the highest close since May 12. March soybean oil gained 90 points to 54.84 cents per pound.
Fundamental analysis: Soybean futures rallied for a seventh consecutive session behind strength in soymeal and expectations dryness will cut soybean yield potential in Argentina and Brazil. In Brazil, net drying will continue the next 10 days from non-coastal areas of Rio Grande do Sul through Sao Paulo and southern Mato Grosso do Sul, “leading to an expansion and worsening of crop moisture stress,” World Weather said today. In Argentina, very little rain is expected in at least the next seven to 10 days, World Weather said, leading to “increasing crop moisture stress, especially in areas with the lowest soil moisture, such as from La Rioja through northern Entre Rios and to the north.”
Tomorrow’s weekly USDA export sales report is expected to show net U.S. soybean sales from 700,000 MT to 1.7 MMT for the week ended Dec. 16. In last week’s report, soybean sales totaled 1.309 MMT, led by China at 985,800 MT. Traders are also waiting for any additional business from China, which made a flurry of daily soybean purchases early this month but has been largely absent the past two weeks.
Technical analysis: The bulls have the near-term technical advantage with soybeans extending a six-week uptrend on the daily bar chart and nearby soymeal topping $400 for the first time since early June. The next near-term upside objective for market bulls is closing March soybeans above solid resistance at $13.50. Downside levels to watch include the 200-day moving average at $12.97.
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