Price action: November soybeans rose 23 1/4 cents to $13.53 1/4, closing above the 200-, 20- and 40-day moving averages and gaining 45 3/4 cents on the week. September meal rose $4.30 to $403.90, losing $6.40 week-over-week. September soyoil rose 53 points to 68.29 cents and gained 416 points on the week.
5-day outlook: Soybean futures notched solid gains to end the week, with the November contract gaining an improved technical posture through a close above the 200-day moving average. The area has served as solid resistance and the top-end of the trading range since the beginning of the month, while the 100-day moving average has lent solid support at the low-end of the August range. However, increasing production concerns due to a return of heat and dry weather into the end of the month has handed bulls the needed momentum to extend above the level. World Weather Inc. notes heat and dryness is expected to build across the U.S. Plains and Midwest during the weekend and next week, raising the potential for crop moisture and heat stress as time moves along. However, the forecaster indicates rain has been increased since Thursday’s forecast for Aug. 26-27, with portions of the central and southern Midwest seeing at least some rain that should halt declines in yields.
Traders will also be tuned in for Pro Farmer’s annual crop tour next week, which will provide insight into how varying weather conditions have affected crops throughout the growing season.
30-day outlook: South American weather will become increasingly important as the Brazil and Argentina begin to plant their soybean crops in the coming weeks. However, plantings in Brazil could take off at a slower-than-usual pace due to a slower than normal safrinha corn harvest. Weather in Brazil has proven favorable overall, with regular rains occurring throughout the country, which is further hindering safrinha harvest efforts. Meanwhile, Argentina continues to receive limited rainfall, with World Weather noting the western region is critically dry. Traders will continue to monitor forecasts over the next month as El Niño is expected to evolve in October, which could bring heavy rainfall in Argentina following an extended period of dry weather, which notably reduced 2022-23 production.
90-day outlook: Recent economic data has shed light on a faltering Chinese economy as the country emerges from its Zero-Covid policies. The persisting news has heightened demand suspicions across the marketplace but raises specific concern to the amount of soybeans the country will import as a fresh marketing-year approaches. A string of recent new-crop purchases indicates there is demand, though new crop export sales are lagging nearly 40% behind this time a year-ago. In week ended August 10, USDA reported export net new crop sales of 1.407 MMT, topping the pre-report range by over 100,000 MT. China was the top purchaser during the week at 940,000 MT, while 258,000 MT were to “unknown destinations.”
