Soybean Prices Decline Amidst Flooding in Brazil, Sluggish Global Demand

Soybean prices experienced a decline due to fund and technical selling, influenced by factors such as U.S. planting delays and harvest disruptions in South America. Heavy flooding in Brazil’s Rio Grande do Sul region led to loss of life and increased shipping costs, potentially opening opportunities for U.S. exports.

However, global demand remains sluggish, with China still favoring Brazil over the U.S. Soybean meal and bean oil prices also dropped due to fund and technical selling pressure. Argentina's oilseed union announced participation in a strike protesting labor reform proposals. Improved soil moisture in key U.S. growing areas is seen as positive for development.

Despite severe flooding in Brazil's Rio Grande do Sul, grain and soybean futures declined due to improving crop prospects in the U.S. and Canada. The USDA's weekly sales numbers, released on Thursday morning, will provide further insight.

Brazilian flood damage was not as severe as initially estimated, affecting food storage and grain transportation in southern Brazil. Consequently, government measures were implemented to control rice prices. Forecasts indicate potential decreases in Argentina's soybean production, while Brazil's output is anticipated to be reduced in the upcoming USDA report.

The analysis suggests that soybean prices are currently moving sideways near the $1231.20 level. As long as the price remains above this level, a bullish outlook is maintained, with a next target of $1262.10. Positive signals from the Stochastic indicator support this bullish trend. The expected trading range is between $1225.00 (support) and $1260.00 (resistance). If the price drops below $1231.20, it could signal a reversal of the bullish trend and a potential decline.

Data for Technical Analysis (1H) CFD US Soybeans Futures - Jul 24 (ZSN4)

Resistance : 1233.02, 1233.87, 1235.26

Support : 1230.24, 1229.39, 1228.00       

1H Outlook 

Source: TradingView

Buy/Long 1 If the support at the price range 1227.24 - 1230.24 is touched, but the support at 1230.24 cannot be broken, the TP may be set around 1234.01 and the SL around 1226.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1233.02 - 1236.02, TP may be set around 1239.60 and SL around 1229.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1233.02 - 1236.02 is touched, but the resistance 1233.02 cannot be broken, the TP may be set around 1230.24 and the SL around 1237.50, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1227.24 - 1230.24, TP may be set around 1225.60 and SL around 1234.50, or up to the risk appetite.       

Pivot Points May 9, 2024 02:28AM GMT