Soybean Prices Surge Amid Global Trends and Record Exports

Soybean prices experienced an increase due to commercial and technical buying, influenced by ongoing monitoring of U.S. harvest activity and planting conditions in South America. Variable weather conditions in South America, including both dry and wet areas, along with forecasts of hotter temperatures in southern Brazil, have contributed to the volatility. Despite concerns about larger supplies, strong domestic demand supported soybean futures.

The anticipated U.S. oilseed production for 2023/24 is expected to decrease from the previous month. Soybean production is projected to drop due to lower yields, leading to unchanged ending stocks. Globally, there is a slight decline in oilseed production, particularly in soybean output for India and Canada. Global soybean exports are decreasing, mainly from the U.S., while crush increases for China and the U.S. Global soybean ending stocks are decreasing, mainly in China, Brazil, and India.

Soybean futures reached a three-week high, boosting corn and wheat prices, driven by strong U.S. domestic market demand. Soybean futures were volatile, influenced by export demand, tight supplies, and news of soybean sales to China. Some traders anticipate seasonal price lows, as U.S. farmers conclude their harvest. Monthly U.S. soybean crush reached its highest-ever level for September, contributing to bullish market sentiment. China bought 132,000 tons of 2023/24 U.S. soybeans, contributing to soybean meal surges. Soybean oil faced pressure from spread trade and follow-through selling.

In Brazil, farmers are expected to plant more soybeans and less corn in the 2023-2024 season. Unattractive corn prices relative to soybeans and adverse effects of the El Niño weather pattern on corn in Brazil are key factors. The 2023/2024 soybean crop in Brazil is projected to be a record 5,953 million bushels, with soybean acreage expanding. Despite low soybean prices, farmers find soybean cultivation more economically viable, aided by decreased production costs.

Brazilian soybean exports are forecasted at a record 102 million tons, driven by available supplies, favorable exchange rates, and global demand. The Brazilian government's biodiesel blending mandate increase contributes to higher soybean domestic use. Rising soybean prices may prompt the government to release more stocks and eliminate import duties to control food inflation. As a result, the price of soybeans is likely to increase slightly in the short term. You may find adjustments up and down in the uptrend frame.

Data for Technical Analysis (1H) CFD US Soybeans Futures - Nov 23 (ZSX3)

Resistance : 1312.66, 1313.43, 1314.67

Support : 1310.18, 1309.41, 1308.17          

1H Outlook

Source: Investing.com                                                       

Buy/Long 1 If the support at the price range 1308.68 - 1310.18 is touched, but the support at 1310.18 cannot be broken, the TP may be set around 1313.34 and the SL around 1307.93, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1312.66 - 1314.16, TP may be set around 1316.00 and SL around 1309.43, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1312.66 - 1314.16 is touched, but the resistance 1312.66 cannot be broken, the TP may be set around 1310.09 and the SL around 1314.91, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1308.68 - 1310.18, TP may be set around 1307.00 and SL around 1313.41, or up to the risk appetite.       

Pivot Points Oct 19, 2023 03:28AM GMT