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NEAR-TERM MARKET FUNDAMENTALS: Good weather for harvest in South America, speculative long liquidation selling and forecast for a hefty supply ahead has helped to pressure the market. Brazil supply officials from Conab pegged the Brazil soybean crop at a new record high 67.57 million tonnes this morning, up more than 10 million tonnes from last year and up from the latest USDA forecast of 66 million tonnes. Traders indicate that El Nino has caused palm production in Malaysia to be negatively impacted and that dry weather into the second quarter could also cause disruption in production. February production was thought to be down near 6% from last year. Big meal deliveries and talk of slow export demand helped to pressure the meal market overnight. Meal exports from India in February were just 218,748 tonnes, down 42.6% from last year and this pushed cumulative exports for the first five months of the marketing year to 1.3 million tonnes, down 43.4% from last year. The soybean complex started the week on a positive note with all three markets trading mostly higher throughout the day. Weekly soybean export inspections, however, were below trade expectations at just 30.9 million bushels. Cumulative inspections stand at 81.3% of the USDA’s export projection for 2009/10 versus a 5-year average of 69.1%. Still, inspections need to average just 10.1 million bushels each week to reach the USDA’s projection. Traders see higher crush and export numbers for Wednesday morning’s USDA update. Traders are looking for the USDA to lower its estimate of 2009/10 ending stocks to near 195 million bushels. Ending stocks were lowered to 210 million bushels in February from 245 the prior month. Argentina and Brazil are experiencing mostly dry conditions with scattered rains forecast into this week in southern growing areas of Argentina and in northern growing areas of Brazil. The rains in Brazil are expected to be light enough to cause only minimal harvest delays with about 1/3rd of the crop there already harvested.
TODAY’S GUIDANCE: The technical picture remains weak for meal and soybeans with the break under the February low for May meal leaving 250.80 as next downside objective. Selling resistance for July soybeans drops down to 954 3/4 and 962 1/2 with 893 as next objective. Use 881 3/4 as next objective for November soybeans with 929 1/4 and 933 1/4 as selling resistance.
Soybean Market Commentary – 2010.03.09
by Terry Roggensack on March 9, 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: Good weather for harvest in South America, speculative long liquidation selling and forecast for a hefty supply ahead has helped to pressure the market. Brazil supply officials from Conab pegged the Brazil soybean crop at a new record high 67.57 million tonnes this morning, up more than 10 million tonnes from last year and up from the latest USDA forecast of 66 million tonnes. Traders indicate that El Nino has caused palm production in Malaysia to be negatively impacted and that dry weather into the second quarter could also cause disruption in production. February production was thought to be down near 6% from last year. Big meal deliveries and talk of slow export demand helped to pressure the meal market overnight. Meal exports from India in February were just 218,748 tonnes, down 42.6% from last year and this pushed cumulative exports for the first five months of the marketing year to 1.3 million tonnes, down 43.4% from last year. The soybean complex started the week on a positive note with all three markets trading mostly higher throughout the day. Weekly soybean export inspections, however, were below trade expectations at just 30.9 million bushels. Cumulative inspections stand at 81.3% of the USDA’s export projection for 2009/10 versus a 5-year average of 69.1%. Still, inspections need to average just 10.1 million bushels each week to reach the USDA’s projection. Traders see higher crush and export numbers for Wednesday morning’s USDA update. Traders are looking for the USDA to lower its estimate of 2009/10 ending stocks to near 195 million bushels. Ending stocks were lowered to 210 million bushels in February from 245 the prior month. Argentina and Brazil are experiencing mostly dry conditions with scattered rains forecast into this week in southern growing areas of Argentina and in northern growing areas of Brazil. The rains in Brazil are expected to be light enough to cause only minimal harvest delays with about 1/3rd of the crop there already harvested.
TODAY’S GUIDANCE: The technical picture remains weak for meal and soybeans with the break under the February low for May meal leaving 250.80 as next downside objective. Selling resistance for July soybeans drops down to 954 3/4 and 962 1/2 with 893 as next objective. Use 881 3/4 as next objective for November soybeans with 929 1/4 and 933 1/4 as selling resistance.
Tags: Beanoil, Grains, Soybeans, Soymeal
About Terry Roggensack