Soybean Prices Plummet to Multi-Month Lows Amidst Gloomy Market Outlook

Soybean prices experienced a decline, reaching multi-month lows. The market closely monitored harvest activity in Brazil and a forecast of drier conditions in parts of southern Brazil and Argentina. Despite solid domestic crush margins, export demand remained sluggish, with Brazil dominating the global soybean market due to prices more than a dollar below U.S. prices.

The 2023/24 U.S. soybean outlook foresaw lower exports and higher ending stocks. Slow shipment pace through January, coupled with strong competition from Brazil, led to a 35 million bushels reduction in soybean exports forecast. Ending stocks were projected to increase by 35 million bushels, resulting in a season-average soybean price of $12.65 per bushel, down $0.10 from the previous month. Global soybean supply and demand forecasts featured higher beginning stocks, lower production, lower exports, and higher ending stocks compared to the previous month.

In January, U.S. soybean processing decelerated due to disruptions caused by cold weather, impacting overall operations. Key factors such as the soybean planted acres estimate by the USDA, and NOPA's bean oil stocks played crucial roles.

Recently, soybean futures plummeted to three-year lows, driven by a strengthening dollar and concerns over rising global stockpiles affecting U.S. crop exports. The most-active soybean contract on the Chicago Board of Trade (CBOT) fell to $11.79-1/2 per bushel, marking the weakest point since December 2020. Grain prices faced pressure due to favorable weather in South American crop belts and a temporary decline in demand caused by Lunar New Year holidays in Asia.

Speculative funds held noteworthy short positions in the markets, betting on price declines. Soybean prices exhibited clear negativity in trading, reverting to a bearish channel. The market anticipated a potential drop towards 1171.50, with the EMA50 reinforcing the bearish trend unless the price surpassed 1200.00 and sustained above it. The anticipated bearish trend set the expected trading range for this period between support at 1165.00 and resistance at 1190.00.

Data for Technical Analysis (1H) CFD US Soybeans Futures - Mar 24 (ZSH4)

Resistance : 1168.47, 1169.12, 1170.17

Support : 1166.37, 1165.72, 1164.67                      

1H Outlook

Source: Investing.com                                           

Buy/Long 1 If the support at the price range 1161.37 - 1166.37 is touched, but the support at 1166.37 cannot be broken, the TP may be set around 1168.84 and the SL around 1159.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1168.47 - 1173.47, TP may be set around 1178.00 and SL around 1164.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1168.47 - 1173.47 is touched, but the resistance 1168.47 cannot be broken, the TP may be set around 1166.09 and the SL around 1176.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1161.37 - 1166.37, TP may be set around 1158.00 and SL around 1171.00, or up to the risk appetite.       

Pivot Points Feb 15, 2024 02:18AM GMT