Price action: July soybeans rallied 38 1/4 cents on the day to $14.66 1/2, marking an 80-cent gain on the week. November futures closed 50 cents higher to $13.42 1/4, marking an impressive weekly gain of $1.38 and closed on the week’s high.
5-day outlook: Soybeans have entered a steep uptrend on the daily bar chart, evidenced by the November contract rising over two dollars since May 31, with the bulk of that gain coming this week. Bean futures have quickly entered overbought territory, with July trading at the highest level since late April and November trading at the highest level since mid-March. Weather continues to drive soybeans higher, although the effects of dry weather do not have much impact on production at this juncture. Nevertheless, soybean futures have been trading higher alongside corn, giving a good opportunity to make the first sale of the 2023-24 marketing year.
30-day outlook: USDA’s end-of-June Acreage and Quarterly Stocks Reports will be a major market driver, though weather could quickly become the focus following the government’s updated estimates. The recent dry weather allowed planting of what is likely more acres than many expected in the northern Plains. North Dakota indicated increased plantings of 850,000 acres in the March Prospective Plantings report. Most of the spring, Red River basin flooding thwarted planting efforts, leading to a behind-average pace in the northern Plains despite a national average that paced well ahead of schedule. Most of these acres will likely have been planted, thanks to the recent extensive dryness. Depending on what most analysts believe, this could be a bearish surprise following the June acreage report.
90-day outlook: Late-summer weather will play a key role in how soybean futures perform throughout the growing season. The 90-day forecast indicated increased precip in the western Corn Belt, alongside above-normal temps in the eastern Belt. Hot and dry conditions in 2021 showed that soybeans are resilient late in the growing season and can produce near-record yields in those conditions. Precip is needed at some point and is expected towards the latter half of the summer, when soybeans need it most. Soybean exports have turned around after a lackadaisical May, alongside a record NOPA crush for the month. Crush is likely to expand to a record for the current marketing year. Both of these indicate better demand prospects than we thought a month ago, but continued Brazilian exports will help keep a lid on soybean prices as the summer progresses.
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