Soybeans Find Support On Strong Export Sales
Today’s Spotlight Market? – ? The sell-off in Soybean prices this season on expectations of a record U.S. harvest has repercussions for South American producers, as lower prices will discourage plantings on more marginal acreage, as well as reduce the usage of fertilizers as profit margins are squeezed.? This loss of production from Brazil and Argentina could help send more export business to the U.S., which would lend some support to prices in the first half of 2015.
Fundamentals? -? Although grain prices continue to hover near-multi year lows, Soybean futures remain above $10 per bushel despite what could be a record U.S. harvest this fall. Tight old-crop supplies combined with solid demand is helping to keep prices at historically high levels. Soybean exports totaled 226,700 metric tons for the 2013-14 season last week, as buyers are still willing to pay a premium compared to new-crop sales to obtain supplies for short-term delivery. Traders may also be placing a ?weather premium? on new-crop prices as concerns that weather forecasts for dry weather in the next 10 days could hurt the Soybean crop as it goes through the key pod-setting stage. August is normally the critical month for Soybeans and analysts fear that hot and dry weather may return which could force trades to lower their estimates for U.S. Soybean production. However, should Mother Nature cooperate and provide ample moisture and seasonal temperatures next month, we may see any price rally attempts capped as producers may wish to establish short hedgers once the crop get through its critical development stage.
Technical Notes?? -? View Today’s Chart
Looking at the daily chart for November Soybeans, we notice some increased price volatility of late after prices fell nearly $2 per bushel in less than two weeks. It appears that the market is attempting to form a near-term bottom between 1050.00 and 1100.00 with a potential diamond bottom formation on the daily chart. The 14-day RSI is struggling to rise out of oversold territory with a current reading of 33.02. The recent low of 1055.00 is seen as support for November Soybeans, with resistance found at the July 17 high of 1118.75.
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