Soybean Weekly Comments May 19

Soybean Weekly Comments May 19

To start the week soybeans saw small losses to small gains overnight and then added to the gains in the day session to close with decent gains. Spillover support came from the sharply higher wheat markets. While NOPA crush for April came in a bit lower than expected at 173.2 MB, it still set a new record for April, beating April 2020’s 171.8 MB. Soybean oil stocks at 1.957 billion pounds were higher than expected. USDA reported a sale of 100,000 MT of soybean meal to Poland. Gains were limited by a disappointing export shipments report with last week’s shipments at a marketing year low. The afternoon’s crop progress report continues to show rapid planting in the eastern Corn Belt and slow progress in the Northern Plains (although SD has caught up).

Soybeans opened the overnight session lower and extended session losses throughout the night and even accelerated the losses in Tuesday’s session. Early selling was tied to Monday afternoon’s solid planting progress report. Although the estimate was below expectations, it continues to run ahead of the 5-year average. Early losses were kept in check from Monday’s April NOPA Crush estimate. The amount of soybeans crushed in April was a record 173.2 MB, but it was slightly less than expected by the trade. Rumors of export cancellations added to the pressure, helping the front month contracts to trigger computer generated sell signal, which only exaggerated the selling pressure. Slow demand and cheap offerings from Brazil added to the selling pressure. Technically July soybeans are flirting with the gap that was created back on Jully 26. Nov is testing its $12.00 support line.

Wednesday was another rough day in the soybean market as it closed with steep losses. Spillover pressure came from the sharply lower wheat markets and sharply lower soybean oil market. Nov. soybeans closed below $ 12.00 for the first time since Nov. 2021. Favorable weather and rapid planting pace for most of the Midwest added pressure. ND, on the other hand, has had very slow planting pace and that could lead to more acres shifting to soybeans.

In Thursday’s session soybeans traded back and forth in a choppy session and closed with small losses. Early day session gains were due to last week’s export sales report. While old crop sales were at the low end of trade expectations, new crop sales were much higher than expected. Like Wednesday, spillover pressure came from the sharply lower wheat markets. But losses were limited by the higher meal and oil markets. BAGE once again lowered their estimate of Argentina’s crop, this time by 1.5 MMT to 21.0 MMT (USDA is at 27.0 MMT). Abiove increased their estimate of Brazil’s production by 1.4 MMT to 155.0 MMT (equal to USDA’s current estimate) and increased exports by 2.0 MMT to 95.7 MMT. IGC increased their 2023/24 world soybean production by 2 MMT to 403 MMT, which would be 39 MMT more than last year.

July soybean support is at $13.85 while resistance is at $15.00. Nov support is at $12.00 while resistance is at $13.50.

For the week, July soybeans were at $13.0725 down 82.75 cents and Nov. soybeans were at $11.755 down 48.25 cents. July soybean meal was at $409.10 down $23.80. July soybean oil was at $47.27 down $2.25.