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Price action: March soybeans rose 9 1/4 cents to $15.27 3/4, the highest close since June 17 and a 39 1/4-cent gain for the week, while March soymeal dropped $5.00 to $476.30 and March soyoil fell 19 points to 63.06 cents.
5-day outlook: Soybeans found stand-alone strength following several updates from USDA on Thursday which included a few bullish surprises. The fresh data will provide market direction as spring planting nears and producers lock in inputs for the upcoming growing season. Weather in Argentina will also continue to be of importance as the country has endured the worst drought in over 60 years, which has wreaked havoc on the planting and growing of much of the current crop. World Weather Inc. noted early today that northern Argentina received some significant rain Thursday and early today while most of central and southern Argentina was dry. The forecaster further cited that with little follow-up rain through Thursday along with warm to hot temperatures starting this weekend the soil will quickly dry out again and stress to crops will rise.
30-day outlook: Soybean harvest has begun in Brazil and prospects of a record crop will likely hover over the market, underpinning global stocks. The increased likelihood of China switching purchases to Brazil also looms as China has steadily looked to the U.S. for its soybean supplies up to this point in the marketing year. U.S. weekly export sales are certainly beginning to wane and could transform into a much more sizable drop in exports. USDA reported Thursday net sales of 717,400 MT for 2022-23, which was on the lower end of pre-report estimates which ranged from 500,000 Mt to 1.2 MMT. China was the main purchaser for the week at 676,600 MT. However, sales did decline 1% from the previous week and were 73% below the four-week average.
90-day outlook: Spring planting weather in the U.S. and the health of the global economy will be the main market drivers in the next few months. Traders will keep a close eye on long-range forecasts to gain insight into how the planting season will progress along with economic data, namely from China, following the removal of all of its zero-Covid measures which kept the country locked down for over three years. Demand will likely increase, which could impact inflation as supply could struggle to meet pace with demand.
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