Soybean Weekly Comments May 12

Soybean Weekly Comments May 12

To start the week soybeans opened the overnight session steady and like the other grains uncovered some buy orders in the early morning hours which helped push the market to post sharp gains. But like corn, soybeans turned mixed and faltered once the day session started. A sharply higher crude oil market added support overnight, but that could not overshadow the selling pressure from expectations of another record setting planting pace estimate. Trader’s expectations are looking for soybean planting progress to be around 35% to 40% complete vs 21% average. As of May 4, Argentina soybean harvest is estimated at 46% complete vs 59% average. As of May 5, Brazil’s soybean harvest was estimated at 85% complete vs 87% average. Late session pressure came from reports that Brazil’s soybean prices remain at a steep discount to the US and that has exports going that direction. Technically Monday’s close in soybeans was not encouraging.

Soybeans saw small losses overnight and then saw steeper losses in the day session to close with double-digit losses on Tuesday. Pressure came from yesterday afternoon’s crop progress report that showed rapid planting pace, especially in the eastern Corn Belt. Spillover pressure came from the losses in the corn market after another sales cancellation by China. China’s April soybean imports were down 10% from the prior year but January to April cumulative imports is up 7% from the prior year.

In Wednesday’s session soybeans traded back and forth but finished the session with losses with the front months seeing larger losses than the new crop contracts. Rapid planting pace, especially in the eastern Corn Belt, pressured soybeans. Thoughts that the very slow planting pace in the Northern Plains could shift more acres to soybeans added pressure. A lack of fresh news added to the losses. Positioning ahead of Friday’s USDA reports was seen.

On Thursday soybeans were lower most of the overnight session but turned higher early in the day session only to pull back and close within a couple cents on either side of unchanged. Support came from USDA’s report of a sale of 132,000 MT of new crop soybeans to an unknown destination. But that was offset by a poor weekly export sales report. Sales at just 2.3 MB were below the range of trade expectations. CONAB upped their estimate of Brazil’s soybean production by 1.2 MMT to 154.8 MMT while the Rosario Grains Exchange lowered their estimate of Argentina’s crop by 1.5 MMT to 21.5 MMT.

Ahead of Friday’s report, the average trade estimate for old crop ending stocks is 212 MB vs 210 last month and new crop is estimated at 293 MB. This year’s US soybean production is estimated at 4.494 BB (based on a 51.8 bu. yield). For 2022/23 world numbers, the trade has Brazil at 154.7 MMT vs 154.0 MMT last month and Argentina at 24.4 MMT vs 27.0 MMT last month and world ending stocks at 99.1 MMT vs 100.3 MMT last month. For 2023/24, world ending stocks are estimated at 107.4 MMT.

July soybean support is at $13.85 while resistance is at $15.00. Nov support is at $12.50 while resistance is at $13.50.

For the week, July soybeans were at $13.90 down 46.5 cents and Nov. soybeans were at $12.2375 down 56.25 cents. July soybean meal was at $432.90 up $6.80. July soybean oil was at $49.52 down $4.81.