Commentary
The bear camp continues to have a stranglehold on the soybean market as prices extend last week’s break. March soybeans fell 10 3/4 cents to $12.45 1/2 but closed well off session lows. March soymeal dropped 90 cents to $368.5 after making a three-month low early in the session. March soy oil rallied 18 points to 47.81 cents, despite making a seven-month low earlier in the session. Soybean futures continue to undergo heavy selling, marking a fresh six and a half month low. This Friday’s big USDA data dump may offer reasons for managed money and speculative shorts to cover. Beans have dropped in 6 to 7 sessions and have been in a sizable downtrend since mid-November. The 11am Central is when USDA releases the results of its latest quarterly grain stocks survey, small grains seedings survey, final 2023 production report, and updated domestic and global balance sheets. The focus in my view will then shift to Brazil’s winter corn crop, and to discussions about the 2024 acreage for the U.S. growing season. Today’s export inspections disappointed as volume was about half of what it was this time last year. Brazil is besting offers at 60 cents per bushel lower than US offers into China. Therefore, flash sales announcements have been nonexistent to start the year. Technically beans need to retake what was trendline support this week at 1257, or the downtrend technically is fully intact in my view. Todays close at 1245 was below the October lows. Next support is the 5 percent threshold for calendar year 2024 at 1234. (Today’s low was 1236). Below 1234, its katy bar the door to next support levels at 1181, trendline support at 1173 and then 10 percent down for the year at 11.68. Above 1249, (Bollinger Band) next resistance is 1257. Above 1257, I think the market can retest the gap at 1291-1297. A close over 1295.4 is needed this week to turn this market higher in my opinion. Managed funds have flipped to a net short in beans. Per last CFTC data, managed money is net short approximately 11500 contracts.
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