Soybean Weekly Comments April 12

Soybean Weekly Comments April 12

Soybeans started the week by trading back and forth on both sides of unchanged in a choppy session and faded late in the session to close with small losses. There wasn’t much fresh news to move the markets today and traders are looking ahead to Thursday’s USDA supply and demand report. Spillover pressure came from the sharply lower soybean oil market. Last week’s export shipments were in the range of trade expectations but marketing year to date shipments are running 19% behind last year’s pace and it would not be surprising to see USDA lower soybean exports in Thursday’s report. Brazil’s harvest is estimated at 78% complete vs. 83% average. Argentina will start releasing soybean harvest progress numbers in the next couple of weeks.

Soybeans spent most of a choppy session on the lower side and closed with losses on Tuesday. Technical selling, slow demand, and the advancing harvest in Brazil all pressured the market. Forecasts for rain this week in the eastern Corn Belt added pressure. USDA reported a sale of 124,000 MT of soybeans to an unknown destination. Dr Cordonnier left his South American production estimates unchanged with Brazil at 145 MMT and Argentina at 51 MMT. AgResouce increased its Brazil production estimate by 1.6 MMT to 145.5 MMT.

In Wednesday’s session soybeans opened higher and spent the overnight session on the plus side but started fading at the start of the day session and then added to the losses to close solidly lower. Early support came from bargain buying. USDA reported a soybean sale for the second day in a row. Today’s sale was 254,000 MT to unknown. Demand worries pressured the market as US sales have been slow and traders are concerned that USDA will cut soybean exports in tomorrow’s report. Brazil’s export association increased their estimate of Brazil’s April soybean shipments by 20% to 12.7 MMT.

On Thursday soybeans traded on both sides of unchanged overnight, hit the session’s low when the report came out at 11:00 but was able to trim losses after that, closing with small losses. Last week’s export sales were in the range of trade expectations but sales are still running 19% behind last year’s pace. CONAB put out updated numbers this morning. They slightly lowered their estimate of Brazil’s soybean production from 146.9 MMT to 146.5 MMT.

USDA’s report was negative for soybeans. US ending stocks came in at 340 MB, 25 MB than last month and 21 MB more than expected. USDA cut exports 20 MB, cut seed and residual 10 MB, and cut imports 5 MB. The national average price was lowered $0.10 to $12.55.

South American numbers were also disappointing. USDA left Brazil’s production unchanged at 155.0 MMT (the trade was expecting to see a cut of 3.2 MMT) and left Argentina’s production unchanged at 50.0 MMT (the trade was expecting a 0.7 MMT increase). World ending stocks were estimated at 114.2 MMT, down 0.1 MMT from last month but 0.6 MMT higher than expected.

Support for May soybeans is at $11.25 while resistance is at $12.35.

For the week, May soybeans were at $11.74 down 11.0 cents and July soybeans were at $11.8675 down 10.0 cents. May soybean meal was at $344.40 up $11.30, May soybean oil was at $45.89 down $3.00.