Price action: March soybeans rose 33 1/2 cents to $16.35, the highest settlement for a nearby contract since a nine-year closing high of $16.60 1/2 last May. March soybean meal rose $5.80 to $453.70 per ton and March soybean oil rose 258 points to 70.15 cents per pound, an eight-month high.
Fundamental analysis: Nearby soybean futures rose to a nine-month high as escalating Russia/Ukraine concerns fueled broad strength across commodity markets. Fresh export business and continued expectations for drought-driven crop shortfalls in South America contributed to soy complex strength. Argentina’s 2021-22 soybean and corn crops could see yields continue to decline in the weeks ahead with abundant rains only expected to arrive in mid-March to relieve a lengthy period of dry weather, the Buenos Aires Grain Exchange said yesterday. Pro Farmer consultant Michael Cordonnier cut his Argentine soybean crop estimate by 1 MMT, to 39 MMT and left his Brazilian estimate unchanged at 124 MMT. Cordonnier also left his Paraguay soybean crop peg at 5 MMT.
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The tighter supply outlook has fueled a nearly month-long buying spree from China and others that extended into this week. Early today, USDA reported a daily sale of 132,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Since Jan. 28, USDA has reported a combined 3.65 MMT of soybean sales to China or “unknown destinations.” By comparison, over the month prior to Jan. 28, sales to China and unknown destinations totaled just 648,000 MT. Also today, USDA reported 975,102 MT (35.8 million bu.) of soybeans inspected for export during the week ended Feb. 17, down from 1.16 MMT the previous week. Expectations ranged from 900,000 MT to 1.25 MMT.
Technical analysis: Bulls are firmly in command in the soybean market, driving March futures to a contract high at $16.41, topping the previous high at $16.33. New-crop November futures posted a contract high at $14.83. Resistance on the continuation chart comes in around the nine-year intraday high at $16.77 1/4, reached May 12, then the psychologically important $17.00 level. Large speculators increased their bullish bets in soybean for the fourth straight week, based on Commodity Futures Trading Commission data, meaning the market may be vulnerable to a fund-driven sell-off if key support levels are breached. Key downside levels include the 10-day moving average at $15.85 3/4 and last week’s low at $15.42 1/4.
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