Commentary
In my opinion last Friday’s USDA crop report was about as tame as they come, containing few surprises. It leaves weather, near term demand and focus on the June 30 acreage report as the drivers of price in my view. The acreage numbers truly do matter in a year when supplies are tight, but weather, as its 90 percent of our pricing influence could ultimately be the largest wild card and unknown at this point. It is my belief that hot weather is advantageous to the developing crops prior to pollination until/unless the crop runs out of moisture. Both old and new crop soybeans fell sharply for a second straight session as the soy complex joined a broad commodity selloff fueled by sharp declines in U.S. equities, which saw the S&P 500 index sink to a 15-month low amid growing concerns over soaring inflation and a potential recession. Despite today’s sharp losses, technical damage to the July 2022 soybean chart appears limited with the five-week uptrend still intact. The market remains above most moving averages and other key support levels in my opinion, though a follow-through push tomorrow under the 20-day moving average near today’s low at $17.02 could have bears targeting the 40-day moving average at about $16.81. Crop progress and condition for soybeans came in at 88 percent planted for the national average. The USDA also released its first condition report this afternoon as well, with the good to excellent category coming at 70 percent good to excellent, versus 68 percent which is the five-year average. No new trade recommendations as of this post.
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