Morning Soybeans: SA Dry for Several More Days but Improving
The outlook for improving rain amounts for southern Brazil and Argentina helped to pressure the soybean market yesterday, but the short-term forecast is still mostly dry. In addition, corn and wheat were under pressure with the easing of tensions in Ukraine, as Russia pulled back some troops after military exercises near the border. Exporters announced the sale of 101,000 tonnes of US soybeans for delivery to Mexico. NOPA members crushed 182.216 million bushels of soybeans in January, down 2.3% from a record 186.438 million in December and 1.3% below the records for January of 184.654 million bushels set last year. The crush was below expectations despite the inclusion of monthly crush data from a new NOPA member. Processors had been expected to crush 186.677 million bushels in January, according to the average of estimates from nine analysts. Estimates ranged from 183.675 million to 188.500 million bushels, with a median of 187.000 million bushels. NOPA said January 31 soybean oil stocks totaled 2.026 billion pounds, the second largest reading since April 2020. They were down 0.3% from 2.031 billion at the end of December but up 12.6% from 1.799 billion for January 2021. Agroconsult cut their Brazilian soybean crop production estimate to 125.8 million tonnes, down 6% from their previous estimate. This is in sharp contrast to the USDA attaché report, which pegged Brazilian production at 134.5 million tonnes.
MARKET IDEAS
Improving weather conditions for South America, a bearish technical set up from recent technical reversals, and the overbought condition of the market leaves it vulnerable to additional long liquidation selling. May Soybean resistance at 1573 1/4 and 1589 3/4, with support at 1529 1/2 and 1497. May Meal resistance is at 446.90 and 454.60, with 441.10 and 430.60 as support.
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