Price action: July soybeans rose 8 3/4 cents to $12.48 and notched a 16 1/4-cent weekly gain. July soymeal surged $9.80 to $386.50 and rose $17.70 on the week. July soyoil slid 24 points to 44.95 cents and gave up 32 cents week-over-week.
5-day outlook: Strong gains in meal futures propped up the soy complex to end the week, though soybean futures edged mostly sideways in consolidative trade, with solid technical support continuing to underpin prices. Meanwhile, a notable decline in the U.S. dollar lent additional support to commodities along with looming global production concerns amid recent flooding in southern Brazil and persisting rains across the Midwest. Moreover, a progressing harvest in Argentina has uncovered lower-than-expected yields. Look for increased volatility next week following June option expiration today and the long Memorial Day weekend, with solid technical support likely to continue to limit selling, while notable resistance will continue to serve at the 200-day moving average of $12.82.
30-day outlook: USDA reported soybeans were 52% planted across the U.S. as of May 19, three percentage-points ahead of the average. Soybean plantings have held an above-average pace since the initial Crop Progress Report at the beginning of April. However, final plantings will certainly require the cooperation of mother nature. Producers in areas where May weather has proven more challenging have likely pondered, or already committed to acreage switches, with the recent rally likely making the decision to plant soybeans a bit more logical. The question will remain, however, did producers who could plant more corn do so, and what areas were affected to the point corn acres were ultimately switched to soybeans? This will likely spur increased volatility as USDA’s June acreage report approaches.
90-day outlook: While U.S. soybeans have notched a notable year-over-year decline in exports, soymeal business has proven quite robust. However, harvest in Argentina following last year’s historic drought could dampen U.S. prospects in the coming weeks and months. USDA’s weekly export sales data, released Thursday showed U.S. soymeal sales totaled 145,300 MT during the week ended May 16, falling 52% from the previous week and 39% from the four-week average and were below the expected pre-report range. This combined with expectations of lingering U.S. dollar strength could limit a sustained soybean rally, though traders will certainly maintain a focus on South America’s final production.
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