Soybean Weekly Comments June 7

Soybean Weekly Comments June 7

To start the week soybeans fell lower at the start of the overnight session and then held steady. But losses accelerated in the day session and the market closed sharply lower. Expectations of good planting progress in the afternoon’s crop progress report pressured soybeans. The report did show planting ahead of the 5-year average with KY, LA, and MI the only states below average and all 3 were just 1% lower than average. Technical selling added to the losses. Weakness in the Brazilian real added pressure as that makes their soybeans more attractive in the export market. Losses were limited by a friendly export shipment report with last week’s shipments at the top of the range of trade expectations and the highest out of the past 8 weeks. USDA’s April crush reported put crush at 177.6 MB, a bit higher than the average trade estimate of 175.5 MB but considerably lower than April 2023’s 187.0 MMT.

In Tuesday’s session soybeans mostly saw small gains overnight but dropped lower at the start of the day session. The market was able to recover only to fade late in the day session and closed with small losses. Soybeans have closed lower 6 sessions in a row and the Nov. contract has dropped 74 cents since May 23. Pressure came from ideas that wet conditions in multiple areas of the US will shift more acres from corn to soybeans. Dr. Cordonnier lowered his US corn acreage estimate by 500,000 acres and increased his soybean acreage by 300,000 acres to 86.8 million acres. He left his soybean yield estimate unchanged at 52 bu/acre, which would work out to production of 4.46 BB (right in line with USDA’s estimate of 4.45 BB). Losses were limited by the government of Brazil’s RGDS estimating that recent flooding will cut their soybean production 2.7 MMT from 22.2 MMT to 19.5 MMT. CONAB had an estimate of 21.4 MMT before the flooding.

Soybeans were higher overnight but turned lower at the start of the day session. The market did get back on the positive side only to once again fade late in the day session and closed with small losses on Wednesday. Soybeans have now closed lower 7 sessions in a row. Fund selling and a lack of fresh news pulled soybeans lower. Drier weather forecasts that should aid in soybean planting added pressure. S&P Global left their soybean production estimate unchanged at 152 MMT (USDA is at 154 MMT) and is already projecting next year’s crop at 163 MMT. In Argentina, farmer selling picked up in May with 39% of the crop sold but it’s still the slowest pace in 9 years.

On Thursday soybeans saw small gains overnight but shot higher at the start of the day session and then added to the gains to close sharply higher. Thursday’s main driver was bargain buying after 7 straight lower sessions. Spillover support from the sharply higher soybean oil market added to the gains. Reports that Brazil is considering raising taxes on farmers and crushers added support as this will make their exports less competitive. Brazil’s marketing year to date export sales (Feb through June) are estimated to be at 59.8 MMT vs. 61.9 MMT at the same time last year. Last week’s export sales were at the bottom of the range of trade expectations and the lowest in 14 weeks for old crop while new crop sales are the lowest in 21 years for the end of May.

As of Sunday, there was 22% of the nation’s soybean crop left to plant, or roughly 17.9 million acres. The states with acreage left to plant are IL: 1.99 million, IN: 1.9 million, IA: 1.6 million, KS: 1.4 million, MN: 1.5 million, MO: 1.9 million, ND: 2.3 million, and SD: 1.3 million.

Support for July soybeans is at $11.67 while resistance is at $12.65.

For the week, July soybeans were at $11.7925 down 25.75 cents and Nov. soybeans were at $11.5775 down 26.75 cents. July soybean meal was at $360.70 down $4.00 and July soybean oil was at $43.63 down $1.89.