Soybean Prices Fall on High U.S. Stocks, Strong Global Supply

Soybean prices continued to decline due to technical and fund-driven selling, exacerbated by high U.S. stock estimates and strong global supply. Futures on the Chicago Board of Trade (CBOT) fell between 10 to 18 cents, with near-term contracts leading the decline.

Soybean meal and oil prices also weakened, with soymeal losing $3.60 per ton and soy oil dropping 73 points. The USDA reported private export sales of 120,000 metric tons (MT) of soybeans to undisclosed destinations, while traders await the weekly Export Sales report, expecting old crop sales between 300,000 and 800,000 MT and new crop sales between 0 and 50,000 MT. 

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report left the U.S. soybean balance sheet unchanged, maintaining 2024/25 ending stocks at 380 million bushels. However, the national average cash price was lowered by 10 cents to $10.10 per bushel. Despite reduced production forecasts for Argentina and Paraguay due to adverse weather, overall global supply remains robust due to Brazil’s strong harvest. 

Brazil’s soybean production is a focal point, with Abiove keeping its estimate at 171.7 million metric tons (MMT), slightly above the USDA’s 169 MMT projection. Meanwhile, Argentina’s production faced downward revisions, with the Rosario Grains Exchange lowering its estimate to 47.5 MMT due to persistent heat and dryness. Global soybean carryout stocks were revised down by 4.03 MMT to 124.34 MMT, primarily due to Argentina’s lower output. 

Brazil’s February soybean exports are expected to reach 10.1 MMT, an increase from previous estimates. In contrast, U.S. soybean exports have slowed due to price competitiveness. Meanwhile, Pakistan has resumed U.S. soybean imports after a two-year hiatus, with 265,000 MT expected to arrive in the coming months. This is crucial for Pakistan’s poultry sector, ensuring a stable supply of high-quality feed. 

Soybean futures struggled amid bearish fundamentals, with prices dipping below $10.30 per bushel following the WASDE report. Weak export demand, strong Brazilian production, and high U.S. stock estimates continued to pressure prices. Although Argentina’s production outlook was revised downward, it was insufficient to offset the global surplus. 

Technical analysis suggests further downside potential for CBOT soybean futures, with a target range of $10.22 to $10.33 per bushel. The break below key support levels indicates a possible trend reversal, while a bearish divergence in the Relative Strength Index (RSI) supports further declines. However, a breakout above $10.58 could signal a continuation of the uptrend. 

Data for Technical Analysis (1H) CFD US Soybeans Futures - Mar 25 (ZSH5)

Resistance : 1031.42, 1031.87, 1032.58

Support : 1030.00, 1029.55, 1028.84                

1H Outlook

Source: TradingView  

Buy/Long 1 If the support at the price range 1028.00 - 1030.00 is touched, but the support at 1030.00 cannot be broken, the TP may be set around 1031.79 and the SL around 1027.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1031.42 – 1033.42, TP may be set around 1034.20 and SL around 1029.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1031.42 – 1033.42 is touched, but the resistance 1031.42 cannot be broken, the TP may be set around 1029.92 and the SL around 1030.42, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1028.00 - 1030.00, TP may be set around 1026.40 and SL around 1032.42, or up to the risk appetite.       

Pivot Points Feb 13, 2025 03:29AM GMT