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NEAR-TERM MARKET FUNDAMENTALS: Improving crop conditions and ideas that the stronger US dollar could slow the export outlook has helped drive the market lower. The market remains in a steady downtrend moving to the lowest level since mid-November overnight on a continued expectation for higher crop production out of South America and expanding world and US soybean supply ahead. Funds were noted sellers again yesterday and a continued uptrend in open interest on the break is seen as a negative force. Old crop soybean contracts lost ground to the new crop contracts yesterday on ideas that soybeans might need to rally to maintain needed acreage this spring and/or ideas that there will be plenty of supply on the market by the spring if the weather remains favorable in South America. Traders again talked about private estimates that may hit 67 million tonnes in Brazil from the USDA January estimate of 65 million tonnes and from 63 million in December. Wet weather is expected to continue in parts of the soybean belt in Brazil which is generally considered beneficial, although this could cause some harvest delays in the north. Some analysts are crediting this year’s increased rainfall in Brazil to the presence of an El Nino effect in the Pacific. The USDA announced a sale of 100,000 tonnes of US soybeans to China yesterday but this move had little impact as traders see China shifting purchases to South America ahead. Weekly export inspections were 44.6 million bushels which pushed total cumulative shipments to 61.0% of the USDA’s projection for 2009/10 season versus a 5-year average of 49.3%. Inspections need to average 16.3 million bushels each week to reach the USDA’s projection. Taiwan is tendering to buy 40,000-60,000 tonnes of soybeans from the US or Brazil.
TODAY’S GUIDANCE: The trend has turned down and unless there is a weather glitch in South America like too much dryness in Argentina ahead, the market looks to remain in a downtrend. Selling resistance for May soybeans moves down to 977 1/4 and 980 3/4 with 932 3/4 and 904 1/2 as next downside objectives. November soybean selling resistance moves down to 949 1/2 with 924 and 909 1/4 as next downside objectives.
Soybean Market Commentary – 2010.01.20
by Terry Roggensack on January 20, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: Improving crop conditions and ideas that the stronger US dollar could slow the export outlook has helped drive the market lower. The market remains in a steady downtrend moving to the lowest level since mid-November overnight on a continued expectation for higher crop production out of South America and expanding world and US soybean supply ahead. Funds were noted sellers again yesterday and a continued uptrend in open interest on the break is seen as a negative force. Old crop soybean contracts lost ground to the new crop contracts yesterday on ideas that soybeans might need to rally to maintain needed acreage this spring and/or ideas that there will be plenty of supply on the market by the spring if the weather remains favorable in South America. Traders again talked about private estimates that may hit 67 million tonnes in Brazil from the USDA January estimate of 65 million tonnes and from 63 million in December. Wet weather is expected to continue in parts of the soybean belt in Brazil which is generally considered beneficial, although this could cause some harvest delays in the north. Some analysts are crediting this year’s increased rainfall in Brazil to the presence of an El Nino effect in the Pacific. The USDA announced a sale of 100,000 tonnes of US soybeans to China yesterday but this move had little impact as traders see China shifting purchases to South America ahead. Weekly export inspections were 44.6 million bushels which pushed total cumulative shipments to 61.0% of the USDA’s projection for 2009/10 season versus a 5-year average of 49.3%. Inspections need to average 16.3 million bushels each week to reach the USDA’s projection. Taiwan is tendering to buy 40,000-60,000 tonnes of soybeans from the US or Brazil.
TODAY’S GUIDANCE: The trend has turned down and unless there is a weather glitch in South America like too much dryness in Argentina ahead, the market looks to remain in a downtrend. Selling resistance for May soybeans moves down to 977 1/4 and 980 3/4 with 932 3/4 and 904 1/2 as next downside objectives. November soybean selling resistance moves down to 949 1/2 with 924 and 909 1/4 as next downside objectives.
Tags: Grains, Soybeans, Soymeal, Soyoil
About Terry Roggensack