Soybean Weekly Comments May 3

Soybean Weekly Comments May 3

Soybeans traded mostly on the higher side in Monday’s choppy session. The market faded late in the day session but still closed with small gains. Last week’s export shipments at 9.2 MB were a marketing year low, but in the range of trade expectations as seasonally this is when Brazil’s exports take off. Technical buying and an oilseed worker strike in Argentina supported the market. Cargill’s head of Brazilian operations believe CONAB’s production estimate should be increased as “soybean harvest is not that much worse than last year.” CONAB is currently at 146.5 MMT vs. 154.6 MMT last year. USDA is currently estimated production of 155.0 MMT. Soybean planting is running ahead of average pace at 18% complete vs. 10% average. But this was at the low end of trade expectations, which ranged from 18% to 23%.

On Tuesday soybeans were lower overnight but got close to positive territory late in the overnight session. But the market then fell lower throughout the day session and closed sharply lower. Pressure came from faster than average planting progress in yesterday afternoon’s crop progress report with planting at 18% complete vs. 10% average. The sharply higher US dollar added pressure. Spillover pressure came from the 2nd day in a row of steep losses in the soybean oil market. Losses were limited by a strike of port and oilseed workers in Argentina which will slow movement of grain. In other South American news, Datagro raised their estimate of Brazil’s production by 1.6 MMT to 147.9 MMT. Currently, CONAB is at 146.5 MMT and USDA is at 155.0 MMT. Dr. Cordonnier left his South American production estimates unchanged with Brazil at 147.0 MMT and Argentina at 51.0 MMT.

In Wednesday’s session soybeans gapped lower at the start of the overnight session and then traded in a tight range. But the market climbed higher throughout the day session and closed with decent gains. Overnight losses came from reports that the oilseed and port workers in Argentina ended their strike. Forecasts for rain that will likely slow down planting supported the market in the day session. After the close USDA released their March crush report. March crush was 203.6 MB, lower than the average trade estimate of 206.0 MB and not quite enough to beat the all-time record of 204.3 MB from Dec. 2023. But it did set a record for the month of March, beating March 2023’s 198.0 MB.

On Thursday soybeans opened higher overnight and then added to the gains for the rest of the overnight and through the day session, closing sharply higher. Support came from heavy rains in Brazil’s RGDS region yesterday. The state has 66% of its soybeans harvested and harvest is now at a standstill due to flooding and more rains are in the forecast. Early ideas are this will reduce their soybean production by 2 to 5 MMT. Rain and cool temps in the forecast for the Midwest that will slow planting added to the gains. Spillover support came from the sharply higher soybean meal market. Last week’s export sales were in the middle of the range of trade expectations. China is on holiday for the rest of the week, but that won’t matter much to the markets as their buying of US soybeans has been minimal lately.
There are about 6 weeks left in the seasonal tendency for soybeans to rally. Producers continue to target $12.35 to advance soybean sales.

Support for July soybeans is at $11.48 while resistance is at $12.45.

For the week, July soybeans were at $12.15 up 37.75 cents and Nov. soybeans were at $12.01 up 26.25 cents. July soybean meal was at $372.20 up $27.50 and July soybean oil was at $43.08 down $2.46.

For the month, July soybeans were down 42.25 cents and Nov. soybeans were down 26.75 cents. July soybean meal was up $10.90 and July soybean oil was down $5.47.