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March soybean futures rose 9 1/2 cents to $16.01 1/2 Friday, up 18 1/2 cents for the week and the first close above $16.00 for nearby soybeans since mid-May last year.
30-day outlook: Soybean futures will require sustained demand to remain at elevated levels, and so far, high prices do not appear to be deterring buyers. Since Jan. 28, USDA has reported a combined 3.52 MMT of soybean sales to China or unknown destinations. By comparison, over the month prior to Jan. 28, sales to China and unknown destinations totaled just 648,000 MT. USDA’s March 9 Supply & Demand Report should produce a sharp drop in USDA’s Brazilian soybean crop estimate and we anticipate a big jump in the U.S. export forecast.
90-day outlook: Market focus will shift away from South America as the U.S. spring planting season approaches, with farmers widely expected to increase soybean acres. The soybean-to-corn ratio reached 2.45 this week, the highest in over four months and an indication the market is trying to “buy” more bean acres. USDA’s Prospective Plantings Report March 31 will set the market tone in early spring. We currently expect soybean plantings to increase 1.2 million acres from last year to 88.4 million acres, though our acreage survey that will be emailed next week will give us a better indication of planting intentions. Strong global demand for vegetable oil may provide longer-term support for the soy complex. Indian traders have contracted to import a record 100,000 MT of soyoil from the U.S. because of limited supplies from drought-hit South America, Reuters reported, and more purchases are possible.
