Price action: November soybeans rose 17 3/4 cents today and gave up a nickel on the week. December soymeal rose $12.90 to $442.40 and gained $18.50 week-over-week. December soyoil rose 53 points to 52.27 cents but is down 112 points from a week ago.
5-day outlook: Soybean futures ended the week on good note, with an extended soymeal rally amid strong U.S. demand breathing life into the complex. Varying weather across South America has heightened concern around global supply prospects, as center-west and northeastern growing regions of Brazil continue to face drier-than-usual conditions, which are expected for another week, according to World Weather Inc. Meanwhile, torrential rains continue to affect southern Brazil, with serious flooding raising the odds crops will need replanted. Earlier in the week, crop consultant Dr. Michael Cordonnier noted that while he left his Brazilian soybean production estimate unchanged at 162.0 MMT for the week, he reduced his bias going forward from ‘neutral’ to ‘neutral to lower.’ Cordonnier estimated that 30% of the country’s crop needed immediate rainfall and indicated that if the rainfall pattern in central Brazil does not improve quickly, his estimates could be lowered as early as next week. Soybeans will continue to find near-term direction from meal futures and South American weather.
30-day outlook: With harvest wrapping up across the U.S., traders will be especially tuned into USDA’s production update, due out November 9. In addition to a production update, the government will release its monthly supply and demand estimates. Earlier this month, using a yield of 49.6 bu. per acre, USDA pegged 2023-24 soybean production at 4.104 billion bu., down slightly from September, though ending stocks remained unchanged at 220 million bu.
90-day outlook: As the marketing-year progresses, market participants will maintain a watchful eye on U.S. exports. Currently projected at 1.755 million bu. for the 2023-24, exports are expected to be 12% lower than the previous marketing-year. However, a fresh U.S. crop could increase export sales as have recently been reflected in USDA’s Weekly Export Sales Report. On Thursday, during week ended Oct. 19, net sales of 1.378 MMT were reported, which were a marketing-year high and up 43% from the four-week average. Moreover, shipments of 2.389 MMT during the week reached a marketing-year high, up 20% from the previous week and noticeably above the four-week average. China was the main destination at 2.0 MMT.
Meanwhile, U.S. meal demand and crush will also be monitored closely in the wake of a drought-stricken Argentine crop earlier in the year and low-carbon fuel mandates, which have elevated U.S. soybean processing to record levels.
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