Soybean Prices Dip Amid Trade Concerns, Adding Pressure to U.S. Farmers

Soybean prices experienced a modest decline due to fund and technical selling. Favorable weather conditions in South America, with near-term rain forecasted, contributed to the overall market sentiment. The USDA's new estimates for South American soybean production were eagerly anticipated, particularly CONAB's updated outlook for Brazil. The focus was on potential adjustments for Brazil's soybean production, as the crop was expected to be smaller than the previous year due to widespread weather issues.

In addition to market factors, concerns arose about the deteriorating trade relationship between China and the United States, posing a threat to U.S. farmers. Analysts highlighted a shift in China's preference for South American crops, potentially leading to renewed trade tensions.

The tension in U.S.-China relations was seen as a potential risk for American farmers, especially if former President Donald Trump was re-elected, as he was reportedly considering imposing high tariffs on Chinese goods. The broader economic trend indicated both the U.S. and the European Union were "deleveraging" from China, adding complexity to the geopolitical landscape.

Turning to specific market details, soybean prices experienced a decline on Wednesday, with the May contract mostly in negative territory. Soybean meal showed mixed trends, while soybean oil rose to six-month highs influenced by declining palm oil production projections in Southeast Asia.

Meanwhile, official Brazilian soybean shipments in February were up from the previous year. Chicago wheat futures hit fresh contract lows due to an Algerian import tender, signaling tough competition from Black Sea supplies. Consequently, soybean prices might face a minor decline and undergo a continual fluctuation in the lower range.

Data for Technical Analysis (1H) CFD US Soybeans Futures - May 24 (ZSK4)

Resistance : 1152.00, 1153.04, 1154.71

Support : 1148.66, 1147.62, 1145.95                          

1H Outlook

Source: Investing.com                                                

Buy/Long 1 If the support at the price range 1143.66 - 1148.66 is touched, but the support at 1148.66 cannot be broken, the TP may be set around 1153.16 and the SL around 1141.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1152.00 - 1157.00, TP may be set around 1157.60 and SL around 1146.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1152.00 - 1157.00 is touched, but the resistance 1152.00 cannot be broken, the TP may be set around 1148.66 and the SL around 1159.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1143.66 - 1148.66, TP may be set around 1142.00 and SL around 1154.00, or up to the risk appetite.       

Pivot Points Mar 7, 2024 02:45AM GMT