SOYBEANS: Sweeping Outside Day Down for Dec Oil a Bearish Development
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November soybeans closed sharply lower on the session yesterday and experienced the lowest close since August 17. More talk of increasing planted acreage and a record Brazil crop for the coming season helped to pressure. Private forecasters continue to see expanding acreage in South America this year. This week, StoneX called for Brazilian production to reach 153.6 million tonnes, well above the recent USDA forecast for 149 million. Either would be a record high. In addition, a surge higher in the US dollar and a collapse in crude oil prices were seen as negative forces. Despite the strong demand from China, it will likely take further yield reductions for the US crop for the market to rally much above 1450. Exporters announced the sale of 396,000 tonnes of US soybeans sold to unknown destination.
For the month of August, Brazil exported 6.161 million tonnes of soybeans which was down from 6.484 million tonnes last year. The sharp break in palm oil futures over the past two nights, plus the recent collapse in energy prices helped to spark aggressive selling in the soybean oil market. The outside day down and sharply lower close for December soybean oil is a bearish technical development. US soybean crush for July was 181.33 million bushels. This was within pre-report estimates. US soybean crush pace for July was 5.85 million bushels/day. The July average crush pace is 5.47 million bushels per day. US soybean oil stocks in July came in at 2.228 billion pounds versus 2.316 last month and 2.070 last year. The average stock level for this time of year is 2.139 billion pounds.
TODAY'S MARKET IDEAS
The short term trend remains down for November soybeans with resistance at 1420, and support at 1388 3/4 and 1365. December meal resistance is at 421.50, with 405.90 as support. December soybean oil experienced a sweeping outside day down which is a bearish technical development. Close in resistance is at 65.21, with 62.91 and 61.29 as next support.