Price action: May soybeans rose 22 1/4 cents to $17.18 3/4, the highest settlement for a nearby contract since September 2012. May soyoil jumped 143 points to 75.97 cents per pound, while May soymeal climbed $8.30 to $485.10.
Fundamental analysis: Broad commodity strength led by the energy and metals markets spurred buying in the soy complex. Global vegetable oil values surged a third straight day, possibly reflecting the continued absence of Ukrainian sunflower oil from the export sector, which very likely contributed to soyoil gains. News that Egypt’s state grain buyer purchased 80,000 MT of soyoil fueled bullishness as well.
The soy complex is likely deriving new-crop support from spring U.S. planting estimates. Recent talk of sharply higher input costs for corn has many observers anticipating a substantial shift of acreage out of corn and into soybeans, with some suggesting the latter would top the former. That likely weighed on beans somewhat. But others are reportedly agreeing with Pro Farmer in expecting corn acres (91.9 million ac., based on our farmer survey) to once again top soybean plantings (we estimate 87.8 million ac.). USDA’s March 31 Prospective Plantings report will be a major key to spring price direction.
Tomorrow’s USDA Export Sales report is expected to show net U.S. soybean sales between 500,000 MT to 1.3 MMT. New crop sales are expected to range between 300,000 MT and 800,000 MT. Old-crop soybean meal sales are seen within the range of 100,000 MT and 300,000 MT.
Technical analysis: Bulls enjoy a technical advantage across the soy complex. Although May soybeans fell short of the February 24 contract high at $17.59 1/4, the settlement at $17.18 3/4 represented a new high close. The 25-cent intervals (for example, $17.25 and $17.50) may mark initial resistance levels, which are then backed by the contract high. The September 2012 peak at $17.94 3/4 implies additional resistance at that level. Look for solid support around psychologically important $17.00, then around today’s low of $16.91. The short-term moving averages place additional support at $16.78 1/2 (10-day) and $16.68 1/4 (20-day). Bears are likely targeting the 40-day moving average near $16.14.
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