Soybean Market Influenced by Brazilian Challenges and U.S. Export Demand

In the soybean market, recent developments in Brazil have influenced prices. The oversold condition of soybeans after a drop last week, coupled with delays in planting in Brazil, has led to concerns. While planting is about 75% complete, it remains slower than usual, and regions in northern and central Brazil have received recent rainfall, while the south has seen less, potentially causing damage. Replanting may be necessary in key areas, and some farmers are reportedly considering switching from soybeans to cotton. Various private firms have downgraded their crop projections for Brazil due to weather issues, with CONAB's updated outlook expected on December 7th.

Despite these challenges, there's strong demand for U.S. beans, with unknown destinations purchasing 123,000 tons. Brazil continues to export beans at a robust pace, with projections exceeding 5 million tons for November. In Argentina, farmers are holding sales due to tight supplies, anticipating changes in trade and monetary policy under the incoming president.

Looking ahead to the U.S. soybean outlook for 2023/24, there's an anticipated increase in production and ending stocks. Soybean production is forecasted at 4.13 billion bushels, up 25 million due to higher yields, with notable changes in several states. Ending stocks are raised to 245 million bushels. Global soybean supply and demand projections for 2023/24 include lower beginning stocks, higher production, higher crush, and lower ending stocks. The global production increase is attributed to higher yields in Russia, Ukraine, and the United States.

Interestingly, the current marketing year sees a rare occurrence where U.S. corn supplies build while soybean supplies decline, keeping soybean prices relatively elevated compared to corn. The Crop Watch producer in North Dakota notes that soybeans have a profit advantage over corn for 2024 plans.

In biotech news, Beijing Dabeinong Technology Group has gained approval for the planting of a genetically-modified, herbicide-tolerant soybean in Brazil. This soybean, DBN9004, is resistant to both glyphosate and glufosinate-ammonium herbicides, addressing weed control issues in South American soybean production.

Brazilian soybean production forecasts for 2023-24 have been adjusted downward due to a drought in Mato Grosso, with expectations now at 155 million metric tonnes.

Chicago soybean futures rose over 1% on Tuesday due to concerns about adverse weather in South America affecting crops. The market also received support from new U.S. export sales. USDA confirmation of soybean sales totaling 123,300 tonnes for 2023-24 delivery added further support.

In the post-holiday week, slow demand and technical selling have led to lower grain and soybean futures. Soybeans settled at a two-week low, influenced by rain in Brazil. January soybeans closed at $13.29¾ per bushel. Technical analysis suggests a bearish trend with a target of 1311.70, emphasizing the importance of staying below 1348.30 for the expected decline.

Data for Technical Analysis (1H) CFD US Soybeans Futures - Jan 24 (ZSF4)

Resistance : 1345.81, 1347.29, 1349.68

Support : 1341.03, 1339.55, 1337.16                                 

1H Outlook   

Source: Investing.com                               

Buy/Long 1 If the support at the price range 1338.03 - 1341.03 is touched, but the support at 1341.03 cannot be broken, the TP may be set around 1346.22 and the SL around 1336.50, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1345.81 - 1348.81, TP may be set around 1350.00 and SL around 1339.50, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1345.81 - 1348.81 is touched, but the resistance 1345.81 cannot be broken, the TP may be set around 1339.96 and the SL around 1350.31, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1338.03 - 1341.03, TP may be set around 1334.00 and SL around 1347.30, or up to the risk appetite.       

Pivot Points Nov 29, 2023 03:41AM GMT