Commentary
This morning’s soybean crush came in at 182.2 million bushels this morning, well below the average 186.7 million bushel (mbu) trade expectation, and down from December’s 186.4 mbu (the record crush for any single month), and 184.7 mbu last January. Trade estimates ranged from 183.7- 188.5 million bushels. Crop scout Agro-Consult this morning estimated 2021/22 Brazilian soybean production at 125.8 MMT after a crop tour, down 8.4 MMT projected before the tour, with yields pegged at a six-year low of 51.7 60-kilogram bags per hectare, or 41.6 bushels per acre. This comes after Pro Farmer slashed their Brazilian soybean crop estimate by 6 MMT to 124 MMT, saying conditions in southern Brazil are worse than expected and there may be additional yield losses due to drought. They also lowered their Argentine soybean crop forecast by 2 MMT to 40 MMT. “Record high or near record high temperatures coupled with scant rainfall over the past several months have resulted in a catastrophe for soybean producers in southern Brazil and the growing season is not over,” Pro Farmer said in a weekly report. I included a weekly continuous soybean chart below chart below. 1540 represents 15 percent higher for the year, while the ten percent threshold sits all the way down at 14.77. While those levels are wide, due to this steep rally, I wouldn’t rule out a significant retreat of prices of that size should funds liquidate. Trendline resistance is up at 16.00 in my view. A close over and next resistance is just above at 16.07, the twenty percent higher on year threshold sits at 16.07, then next trendline resistance at 1643. A close over that level and its last years high at 1667. It seems for now threats of war in Eastern Europe have been subdued at least for the day. The energy sector along with wheat and corn saw sizable losses today giving back some of the rally late last week and yesterday’s push higher. The geo-political situation can flip flop at any moment, therefore caution is warranted here.
Trade Ideas
Futures-N/A
Options-N/A
Risk/Reward
Futures-N/A
Options-N/A
Please join me for a free grain and livestock webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604