Market Analysis: Soybeans
• South American weather continues to be a focus as harvest efforts are occurring in earnest, with expectations of a record Brazilian crop. World Weather Inc. notes that much of Brazil outside of northeastern and a few far southern areas will see regular rounds of showers and thunderstorms through the next two weeks that will bring enough rain to favorably support crop development while slowing soybean harvesting and safrinha planting. Production powerhouse Mato Grasso and nearby areas will have opportunities for fieldwork around the showers expected during the next two weeks, but longer stretches of dry weather will be needed soon to ensure soybeans are harvested in time to allow the safrinha crop to be planted during the favorable period, according to the forecaster.
• Recent rains in Argentina have helped replenish severely drought-ridden soils, which will induce further improvements in soil moisture that will help ensure most crops have adequate soil moisture when drier weather returns Friday through at least Feb. 11. Persisting hot, dry weather in the country led the U.S. ag attaché in Argentina to slash its estimate of the country’s soybean crop to 36 MMT, 9.5 MMT below USDA’s January forecast.
• USDA reported December crush at 187.4 million bu., which was slightly below pre-report estimates of 188.0 million bu. and down from November’s 189.5 million bu. Though the figure was well below December 2021 crush of 198.2 million bu.
• Export commitments are running 4.7% ahead of a year-ago, versus 5.4% ahead last week. USDA projects exports in 2022-23 at 1.990 billion bu., down 8.0% from the previous marketing year.
Technical analysis (from 2/1/23): March soybeans traded a 32-cent range Wednesday, dipping below support at $15.27, $15.16 1/4, along with the 10-day moving average near $15.12 3/4. Additional support lies at the 20-day moving average near $15.06, as well as at $15.08 and at the 40-day moving average of $14.93 3/4. Conversely, a turn higher would encounter resistance at former support at $15.27, then at $15.35 1/2 and again at $15.46 1/4.
• March meal futures traded an $8.80 range, dipping below support at $480.10, but held above the level into the close. Additional support lies at $475.90, with solid support at the near convergence of the 10- and 20-day moving averages around $473.00. Initial resistance stands at $488.80, again at $493.30 and $497.50.
• March soyoil traded a 220-point range, breaching the 20-day moving average of 62.26 early in the session, as well as 61.83, the 10-day moving average of 61.45 and 61.28. Additional support lies at the Dec. 12 low of 58.50. Initial resistance stands at former support at 61.28, along with the 10- and 20-day moving averages.
