Commentary
Today’s WASDE report was largely a yawner. The December report usually is as USDA will wait until the January report to make any production and yield changes from this past US crop season in my view. For beans not much changed. USDA held expected 2023-24 soybean carryover steady with last month at 245 million bushels. USDA made no change to either the supply or demand side of the balance sheet. USDA cut its 2023-24 Brazilian soybean crop estimate by 2 MMT from last month to 161 MMT, but that was offset by a 2-MMT increase to Brazil’s 2022-23 crop figure. USDA left its 2023- 24 Argentine soybean crop forecast at 48 MMT. January 23 beans shed approximately 20 cents for the week while managed money pared back their net long positions to approximately 36K from near 70K a week to 10 days prior. Despite a strong domestic crush, no changes were made to domestic ending stocks in the US. The USDA increased Chinese demand 2 million metric tons, which would normally be seen as friendly but at the same time increased Brazilian exports 2 million metric tons. With no raise or change in China’s crush or domestics usage, funds sold the beans post report. Trade goes back to watching Brazilian weather and demand in my view. Technical levels coming into next week for Jan beans. Support is first at 1295. With a close under, trendline support at 1284. A close under this level and it’s the bottom edge of the Bollinger band at 12.66. ( See Chart). A close under 12.66 and it’s the Oct lows at 1250 for the next downside target. For any sustainable rally to take place, we need consecutive closes above the 200-week moving average at 13.14 and trendline resistance at 13.17. Should that happen look for the market to retest higher levels at 1356/59.
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