After the long weekend, soybeans gapped higher at the start of the overnight session and stayed on the positive side the entire session. The market did trim the gains in the day session but still closed with decent gains. Bargain buying was the main driver on Tuesday. Weather in Argentina added support as dry conditions returned over the weekend. Dr Cordonnier again lowered his estimate of Brazil’s production, now at 145.0 MMT vs. 147.00 MMT last week. He left his production estimate for Argentina unchanged at 50.0 MMT. Brazil’s soybean harvest is now estimated at 32% complete vs. 25% last year. Last week’s export shipments were in the range of trade expectations but are still running 23% behind last year’s pace. While there haven’t been any recent soybean sales, USDA did report a sale of 228,000 MT of soybean meal to the Philippines today.
On Wednesday soybeans saw small losses overnight, but losses accelerated in the day session and the market closed sharply lower. Soybeans were pressured by updated forecasts that added rain for Argentina. Ongoing slow demand and technical selling added pressure. Agroconsult has completed 60% of their crop tour of Brazil’s soybean crop. They updated their production estimate to 152.2 MMT, down 1.6 MMT from their prior estimate. Agroconsult also estimated yields in the state of Mato Grosso are down 18% from last year due to drought. Brazil’s soybean harvest is about one-third complete. Brazil’s export agency estimates Feb. exports will be 7.3 MMT (down 250,000 MT from last Feb.) but soymeal exports are expected to be 580,000 MT higher than last Feb. at 1.86 MMT.
In Thursday’s session soybeans saw small gains in the first part of the overnight session and then added to those gains. But the market fell throughout the day session and closed with double-digit losses. Early gains were due in part to spillover support from the stock market as the tech sector saw some strong earnings reports. Rains in the short-term forecasts for Argentina pressured soybeans with the northern half of the country expecting to see 1-to-4-inch rains over the next few days. Rosario Grains Exchange lowered their soybean production estimate for Argentina by 2.5 MMT to 49.5 MMT due to the hot and dry conditions in January. On the other side, Buenos Aires Grains Exchange estimates Argentina’s crop at 52.5 MMT as recent rains should help the crop bounce back.
Mar support is at $11.45 while resistance is at $12.90.
For the week, Mar soybeans were at $11.33 down 39.25 cents and May soybeans were at $11.4175 down 34.5 cents. Mar soybean meal was at $331.50 down $14.10. Mar soybean oil was at $44.02 down $1.57.