Soybeans Hit Four-Year Low Amid Speculative Selling and Demand Concerns

Soybeans dropped in price due to speculative and technical selling, with soybean oil also declining amid global trends and concerns over China's economy. Export demand is slow, but domestic crush demand remains strong. Export inspections hit a marketing year low. The new marketing year starts September 1st, and June saw a record crush of 175.6 million bushels. Brazil is expected to increase soybean planting by 1.9% for 2024/25.

U.S. soybean production for 2024/25 is expected to decrease to 4.4 billion bushels due to a smaller harvested area. Ending stocks are projected to fall to 435 million bushels, with the average soybean price forecasted at $11.10 per bushel.

Global soybean production remains unchanged, with higher Canadian output offsetting lower Russian output. Global soybean stocks are slightly reduced, with increased stocks in China balanced by decreases in Argentina, Brazil, Paraguay, Russia, the EU, and the U.S. Chinese soybean imports improved in June. Brazil's soybean production estimates were unchanged, and Argentina's crop was slightly reduced.

The soybean market saw significant changes last week due to increased speculative short-selling. Contributing factors included climate pattern changes, import-export regulations, and shifts in global supply-demand balance, leading to higher volatility and fluctuating trader sentiment.

U.S. soybean futures fell to their lowest level in nearly four years on Monday due to strong Midwest crop prospects and concerns about demand. Soybeans also faced pressure from a smaller-than-expected crushing pace in June, with NOPA reporting 175.6 million bushels crushed, below trade estimates.

On the Chicago Board of Trade, November soybeans settled at $10.40 per bushel, the lowest since October 2020. Analysts noted U.S. crops benefited from recent rainfall, which improved soybean prospects. Soybeans also faced pressure from the prospect of trade tensions if Donald Trump wins a second term.

Soybean prices have declined to around $1050.00, with expectations for further drops to $1035.00 and then $1000.00. Maintaining prices below $1070.00 is crucial for the continued decline, as breaking this level could trigger a bullish wave towards $1100.00 before resuming the downward trend. Today's expected trading range is between $1030.00 support and $1170.00 resistance.

Data for Technical Analysis (1H) CFD US Soybeans Futures - Aug 24 (ZSQ4)

Resistance : 1085.57, 1087.52, 1090.67

Support : 1079.27, 1077.32, 1074.17       

1H Outlook

Source: TradingView

Buy/Long 1 If the support at the price range 1074.27 - 1079.27 is touched, but the support at 1079.27 cannot be broken, the TP may be set around 1087.59 and the SL around 1072.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1085.57 - 1090.57, TP may be set around 1096.00 and SL around 1077.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1085.57 - 1090.57 is touched, but the resistance 1085.57 cannot be broken, the TP may be set around 1079.27 and the SL around 1093.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1074.27 - 1079.27, TP may be set around 1070.00 and SL around 1088.00, or up to the risk appetite.       

Pivot Points Jul 16, 2024 01:46AM GMT