Price action: November soybeans started the week off strong, rallying 6 cents to $13.69. December soybean meal closed $3.50 higher at $404.90. December soyoil ended the day unchanged at 60.50 cents.
Fundamental analysis: Soybean futures held onto overnight corrective gains, though today’s trade can be chalked up to positioning ahead of Tuesday’s Crop Production and Supply and Demand reports, which will give the first objective look into soybean yields. Traders anticipate old-crop ending stocks of 256.2 million bu., nearly four million bu. below the August report at 260 million bu. New crop harvested acres are seen as rising to 82.8 million acres, 100,000 acres above the June acreage report at 82.7 million acres. Yield is expected to fall to 50.1 bu. per acre, down .8 bushels per acre from the August Crop Production report at 50.9 bu. per acre. This points to expected production of 4,150 million bushels and ending stocks of 209 million bushels, down from 4,205 million bushels and 245 million bushels in the August Crop Production report.
Soybean demand continues to pace poorly, despite the recent uptick in daily sales announcements. This morning, USDA announced a daily export sale of 185,000 MT of soybean cake and meal to the Philippines for the 2023-24 marketing year. Outstanding sales for meal are at the highest level since 2015 for the 2023-24 marketing year, which begins October 1. This is despite the comparatively poor outstanding sales in soybeans. Mid-morning, USDA reported inspections of 310,073 MT (11.4 million bu.), which were down 96,861 MT from the previous week and near the low-end of the of the pre-report range of 300,000 to 725,000 MT.
The USDA releases the weekly crop progress report this afternoon. Traders see soybean conditions as falling two points to 51% “good” to “excellent,” according to a Reuters poll. A Bloomberg survey sees soybeans as 2% harvested, which would be the quickest start since 2012.
Technical analysis: November soybeans showed strength throughout the session though struggled against downtrend line resistance that has capped all gains since the August 28 peak. The resistance currently stands at $13.70 and will remain key going into Tuesday’s session, a daily close above that level would indicate a likely test of the recent high at $14.09 1/2, though resistance stands at $13.85 and the psychological $14.00 level on the day. Bears are looking for a break of $13.52 support, which would negate a potential “bull flag” on the daily bar chart. Support also stands at $13.61, though is weaker.
December meal futures were supported by a daily export sale announcement and continued Friday’s bounce higher. Bears still retain the technical advantage, but the recent $10+ rally has brought prices back near $408.00 resistance, a close above which would point to a potential interim low in place. Additional resistance stands at $411.00, with the key $420.0 level on deck. Support can be expected at the $400.00 level, backed by $396.30.
December soyoil futures traded in a balanced session, with the session high at 61.00 cents, session low at 60.00 cents and settlement at 60.50 cents. Price has been basing around the late-July, early August support zone around 60.00 cents, a level that will remain key this week. Prices have turned from bullish to a sideways trend, a break of 60.00 cent support on a closing basis likely leads to a downward trend. Initial resistance stands at 61.15 cents, backed by 61.75 cents.
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