Soybean Weekly Comments May 26

Soybean Weekly Comments May 26

Soybeans started the week by opening the overnight session higher and then extended session gains throughout the night and into the day session. Early support was due to technical buying as soybeans have been under heavy selling pressure last week and were in an oversold market condition. Expectations that the afternoon’s report will show good planting progress for wheat and corn added support as it might lead to lower US soybeans acreage. As of May 18, Argentina harvest progress was estimated at 72% complete vs 79% average. As of May 15, Brazil’s soybean harvest was estimated at 99% complete vs 100% average.

On Tuesday soybeans opened lower and extended session losses early and maintained losses throughout the session. Early selling was tied to another strong week of planting progress as producers were able to get another 17% of the nations’ soybeans planted last week. The lack of export news added pressure as it appears that most of the export attention is centered on cheap South American soybeans. Soybeans are also taking a bit of a hit from the lack of progress on the debt ceiling talks as most expected if no compromise occurs and the US defaults on a few payments, trade will be impacted. Dr Cordonnier left his soybean production estimate for Brazil unchanged at 155 MMT but lowered his Argentina production estimate 1 MMT to 22 MMT. Expectations that the slow HRS wheat and corn planting progress in ND will lead to more soybean acreage added selling pressure.

In Wednesday’s session soybeans ended the session mixed with small gains in the front month July contract and small losses in the new crop contracts. Soybeans were caught between dry forecasts for most of the US and ideas that ND’s planting problems will shift corn acres to soybeans. Spillover pressure came from the sharply lower wheat market. BAGE estimates that 13% of Argentina’s soybean acres will be abandoned due to drought and yield is estimated at 26.6 bu. It’s estimated that Brazil’s May soybean exports could reach 15.9 MMT, which if realized would be a new record for May.

In Thursday’s session soybeans closed lower with the deferred contracts seeing bigger losses than the front month July contract. Pressure came from light volume in the market and positioning ahead of the long weekend was seen. Losses were limited by dry conditions in the forecast for most of the growing regions in the US. Last week’s export sales report showed minimal sales of old crop and lower than expected sales of new crop soybeans. China has just 57,000 MT booked but unshipped compared to 2.0 MMT at this time last year. In South American news, BAGE estimates Argentina’s soybean harvest at 78% complete.

July soybean support is at $13.00 while resistance is at $15.00. Nov support is at $11.85 while resistance is at $13.50.

For the week, July soybeans were at $13.3725 up 30.0 cents and Nov. soybeans were at $11.895 up 14.0 cents. July soybean meal at $402.20 down $6.90. July soybean oil was at $48.82 up $1.55.