Price action: May soybean futures rose 2 3/4 cents to $16.80 1/4 but finished off a one-week high at $16.99 posted overnight. May soybean meal rose $5.40 to $453.40. May soybean oil fell 106 points to 74.81 cents per pound after earlier posting a contract high at 77.33 cents.
Fundamental analysis: Nearby soybeans gained on spillover from the wheat market’s steep rally but faded on profit-taking and indications that stepped-up Chinese demand and a South American crop shortfall are factored into prices. The Russia/Ukraine war promises to keep the soy complex elevated for the time being on uncertainty over vegetable oil exports from the Black Sea region. Russia and Ukraine account for about 80% of global sunflower oil exports.
China continued a string of U.S. soybean purchases that began in late January. Early today, USDA reported a daily soybean sale of 132,000 MT to China, equally divided between the 2021-22 and 2022-23 marketing years. Since Jan. 28, USDA has reported a combined 5.596 MMT of soybean sales to China or unknown destinations, a more than seven-fold increase from the pace the previous month.
Net weekly U.S. soybean export sales totaled 857,000 MT for 2021-22, down 31% from the previous week and down 34% from the prior four-week average. Net weekly sales totaled 1.386 MMT for 2022-23, including 1.26 MMT for China. Sales were expected to range from 600,000 MT to 1.05 MMT for 2021-22 and 600,000 MT to 1.3 MMT for 2022-23.
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Technical analysis: Bulls retain their short-term technical advantage in soybeans but the market shows increasing signs of exhaustion. May soybeans rose as high as $16.99 but faded in the face of resistance around the $17.00 area, which also capped gains the previous two days. Further resistance is seen at the contract high of $17.59 1/4 posted Feb. 24. Support at the 10- and 20-day moving averages of $16.46 1/4 and $16.08 1/2, respectively, is backed by strong psychological support at $16.00. A close below $16.00 would have bears targeting the Feb. 15 low at $15.46 1/4.
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