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Commentary
The soy complex closed higher across the board today. Another significant decline in the US dollar today was one supportive factor for beans, with a short-term oversold condition created some short covering while equities firmed as well. Sharply lower crude oil prices kept bean oil from keeping up with beans and meal. No new tariff updates so far today although there are confirmed reports Trump extended a one-month delay in automobile tariffs on Canada and Mexico. China said overnight they are ready for a trade war with the US or any other type of war with the US as trade tensions escalate. In his congressional speech last night, President Trump asked farmers to “bear with him” as he tries to bring China to the table for an even larger trade deal than the Phase 1 agreement in his 1st term. This is giving traders a reason to be optimistic that something will get done down the road in 2025. Howard Lutnick the Commerce Secretary’s offered a more tempered view regarding tariffs Canada and Mexico. Some tariffs are to be dialed back on items included in the USMCA agreement. Whether these tariffs are just a prelude to a reworking of the USMCA deal or better yest trying to lure more companies to move back into the USA, there is too much uncertainty at this moment to pick a direction. I attached a weekly chart below. May beans the most actively traded contract held key support this week. Next week that line of major support at 9.94. Consecutive closes under and its katy bar the door to 964 to 961. A close under and the December lows are retested at 945 in my view. We need to close above 1010/1012 consecutively to push to key resistance at 10.41/10.45. 1010 is where we closed 2024. A close above both trendlines will see the market retest 10.64 to 10.66.
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Sean Lusk
Vice President Commercial Hedging Division
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