Price action: November soybeans rallied 24 3/4 cents to $10.65 3/4 and surged 53 3/4 cents on the week, while December soymeal closed $17.30 higher at $344.10, marking a three-month high close and a $24.90 week-over-week gain. December soyoil slid 54 points to 42.36 cents but notched a 100-point weekly gain.
5-day outlook: Soybeans caught a bid to end the week as surging soymeal futures led the grain complex higher. Soymeal strength has recently been pared by resistance at the 100-day moving average, a level not breached since mid-June, though a seeming short squeeze prompted a further move above the 200-day moving average for the first time since the end of May. While today’s price movement is certainly promising, it could mean profit-taking early next week, especially ahead of USDA’s Quarterly Stocks Report, due out Monday at 11 a.m. CT. A Reuters poll indicates analysts expect Sept. 1 soybean stocks of 351 million bu., which would be a four-year high and up 32.9% from year-ago. The report will drive markets early next week, though movement in meal futures will likely continue to drive prices over the near term.
30-day outlook: South American weather has been at the forefront of the market as of late, as dryness has prevailed throughout many key growing areas. While September is a customary dry season, World Weather Inc. reports the recent weather pattern will prevail in October. The forecaster notes significant rain will not likely impact key soybean or corn production areas for a while, although recent rain in the south of Brazil was good for planting a few early soybeans. Improved rainfall in center west Brazil is still ten days to two weeks away, while Argentina weather will continue dry biased in west-central and some northwestern areas. Look for an increasing focus on weather conditions as planting efforts progress throughout the region.
90-day outlook: An aggressive move by China’s central bank this week to prop up the country’s economy has improved global demand prospects and considered the biggest easing move since the pandemic. The global economy has largely been on edge as the world’s largest importer has persistently battled deflationary conditions, though this week’s move has fueled the biggest weekly rally in Chinese equities since 2008. While export demand for U.S. soybeans has been proven solid in recent weeks, traders will maintain a close eye on exports to China, especially as the presidential election inches closer.
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