Commentary
The biggest surprise in my view in today’s WASDE report from USDA in my opinion was a drop in the U.S. soybean yield to 49.8 bushels per acre, which was at the low end of the range of trade guesses. A sub 50 yield had the algos buying with both hands, but trendline resistance at 14.15 held today, with November beans retreating on the close to close below $14.00. New-crop bean carryover of 200 million bushels is unchanged from last month and is 48 million bushels below the average pre-report trade estimate. The 34-million-bushel increase in beginning stocks was more than offset by a 65-million-bushel cut to the crop estimate to drop total 2022-23 supplies 31 million bu. from last month. On the demand side of the balance sheet, USDA projects crush at 2.235 billion bu. (up 10 million bu. from last month), exports at 2.045 billion bu. (down 40 million bu.), seed use at 102 million bu. (unchanged) and residual use at 20 million bu. (down 1 million). Total new-crop use is forecast at 4.402 billion bu., down 31 million bu. from last month and down 63 million bu. from last year. USDA puts the national average on-farm cash bean price for 2022-23 at $14.00, down 35 cents from last month.
Technical levels to watch through next week are as follows. Resistance for November beans comes in at 1419/1420. A close over and the market could rally to 1432. A close over here could send futures to 14.77 and then 14.85, which is the 50-day moving average. Support through next week is at 13.55. A close under and its 13.39. A close under 13.39 and its katy bar the door to test the July lows at 12.88.
Trade Idea
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Options-N/A
Risk/Reward
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