Soybeans Close Higher Amid Weather Concerns and Mixed U.S. Harvest Results

Soybeans closed higher, but fluctuated throughout the day. Soybean meal prices fell, while soybean oil gained. Soybean conditions slightly worsened, though crop development and harvesting are ahead of schedule. U.S. and Brazilian weather remain key concerns, as Brazil faces heat and drought, which could affect planting.

Soybeans rose due to fund buying and technical factors, with early U.S. harvest reports showing mixed results. Meanwhile, soybean meal prices dropped, and soybean oil rose due to product spread adjustments. The U.S. crop faces drought concerns, while Brazil’s drought could further widen the price gap between the two countries. U.S. exports face delays due to low Mississippi River levels.

Brazil's September soybean exports are estimated at 5.83 million tons, up slightly from previous forecasts. Brazil’s 2024/25 soybean production is forecast at 166.28 million metric tons, up 12.8% from the previous year. However, drought could delay planting if it persists into October.

For the U.S. soybean outlook for 2024/25, there are reductions in beginning stocks, production, and ending stocks. Beginning stocks are lower due to a slight increase in crush for 2023/24. Soybean production is projected to decrease by 3 million bushels to 4.6 billion. With no changes in soybean crush and exports, ending stocks are projected at 550 million bushels, down by 10 million from last month. The U.S. season-average price remains unchanged at $10.80 per bushel, along with soybean meal at $320 per short ton and soybean oil at 42 cents per pound.

Internationally, oilseed production is reduced by 2.8 million tons, mainly due to lower rapeseed and sunflower seed output in the EU, Ukraine, Kazakhstan, and Moldova. However, foreign soybean production is slightly raised by 0.6 million tons due to increases in Paraguay and Canada, despite lower production in the EU and Serbia. Paraguay’s production for 2023/24 is higher due to stronger exports and crushing. Global soybean trade for 2024/25 is expected to increase to 181.6 million tons, with more exports from Paraguay and higher imports by Argentina. Global soybean ending stocks rise slightly to 134.6 million tons, with increases in Argentina and Canada offsetting lower stocks in the U.S. and EU.

Soybean futures increased on Wednesday due to traders covering short positions, driven by concerns over hot and dry weather in Brazil, which could delay soybean planting. In the U.S., soybean harvests are progressing rapidly, with traders adopting a cautious outlook. High yield expectations for U.S. crops are pressuring futures markets, though upcoming rains could slow the harvest.

Soybean prices are indicating a bullish trend for the period. This rise sets the stage for further gains, with the next target projected at $1021.06. However, if the price fails to stay above this level, the upward momentum could reverse, leading to potential negative pressure.

Data for Technical Analysis (1D) CFD US Soybeans Futures - Nov 24 (ZSX4)

Resistance : 1020.44, 1024.15, 1030.17

Support : 1008.40, 1004.69, 998.67

1D Outlook   

Source: TradingView

Buy/Long 1 If the support at the price range 998.40 - 1008.40 is touched, but the support at 1008.40 cannot be broken, the TP may be set around 1022.59 and the SL around 993.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1020.44 - 1030.44, TP may be set around 1050.00 and SL around 1003.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1020.44 - 1030.44 is touched, but the resistance 1020.44 cannot be broken, the TP may be set around 1006.84 and the SL around 1035.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 998.40 - 1008.40, TP may be set around 976.00 and SL around 1025.00, or up to the risk appetite.       

Pivot Points Sep 19, 2024 03:25AM GMT