Price action: November soybeans rose 37 1/2 cents to $12.90, the highest close since Sept. 28, after reaching a near four-month low overnight. December meal futures rose $15.80 to $392.90, the largest daily gain since June 30. December soyoil rose 65 points after notching a four-month low early on.
Fundamental analysis: Soybean bulls were summoned in the wake of USDA’s October data amid figures which fell short of pre-report estimates across the board. However, the most notable figure for the month was the over 4 MMT reduction in new-crop global ending stocks from last month and pre-report estimates. Meanwhile, despite increased carry-in from higher Sept. 1 stocks, 2023-24 U.S. carryover remained unchanged from September at 220 million bu. Total new-crop supplies were cut 23 million bu. to 4.403 billion bu., due to the 18 million bu. increase in supplies and 42-million-bu. cut to the 2023 bean crop estimate due to a 0.5 bu. cut to yield from September. On the demand side of the new-crop balance sheet, crush was increased 10 million bu., exports were cut 35 million bu. and residual use rose 2 million bu., putting total use at 4.183 million bu.
Traders will be increasingly focused on planting and growing conditions in South America following USDA’s more-bullish-than-expected October crop data. While Brazil continues to forecast a record crop of 162 MMT, mother nature must cooperate in order to achieve the expected 4.8% year-over-year increase. World Weather Inc. reports most of Brazil and Paraguay will see a mix of rain and sunshine during the next two weeks that should allow for fieldwork to advance between rounds of rain, with the rain beneficial for summer crop planting with exceptions in southern Brazil and Paraguay where some heavy rain and flooding are likely during the next week. However, rain in northern Brazil may not be great enough to induce significant increases in soil moisture in many areas and much of the region will need greater rain soon or a continuation of regular rain into late this month to support newly planted crops.
Earlier today, USDA reported a daily sale of 295,000 MT for delivery to unknown destinations during 2023-24.
Technical analysis: November soybeans were able to gain significant technical traction, with a close held above the 10-day moving average of $12.72 and just shy of the 20-day moving average of $12.90 1/4. The 20-day will now serve as initial resistance, then at the psychological $13.00 level, then the 100-, 200- and 40-day moving averages of $13.11 1/2, $13.20 3/4 and $13.28 1/4. Conversely, initial support will now serve at the 10-day moving average, then at today’s low of $12.50 1/2, again at $12.44 1/4, $12.36 and $12.21.
December meal futures ended the session above the 20-, 100- and 40-day moving averages of $383.60, $391.60 and $392.40. Initial resistance will now serve at the 200-day moving average of $400.80, while support will lie at today’s failed resistance levels, then at 10-day moving average of $377.10 and again at $374.40, $371.80 and $369.30.
December soyoil futures were able to end the session well off earlier lows, just below initial resistance at 53.38 cents. A push above the area will face additional resistance at 54.05 and 54.49 cents and again at the 10-, 200-, 20- and 100-day moving averages of 55.03, 56.91, 57.06 and 57.97 cents, respectively. Meanwhile, initial support will continue to serve at 52.27 cents, then at 51.83 and 51.16 cents.
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