Soybean Prices Surge Amid Harvest and Global Trade Shifts, Positive Outlook

Soybean prices experienced a modest increase attributed to short covering and technical buying. The market closely monitored U.S. harvest activity and yield results, noting anecdotal numbers exceeding expectations in some areas. Speculation surrounded the quarterly stocks report, expected to show a decrease from the previous year. Concerns arose over a potential government shutdown, which could delay vital USDA reports, including October 12th's yield and production estimates. Soybean meal prices dropped, while bean oil prices rose due to product spread adjustments. Planting in South America also captured market attention.

In terms of U.S. soybean supply and use changes for 2023/24, projections reflected lower beginning stocks, production, crush, exports, and ending stocks. The soybean production estimate was 4.1 billion bushels, a decrease of 59 million, driven by a lower yield despite increased harvested area. Lower soybean crush and export forecasts were attributed to reduced supplies. Ending stocks were projected at 220 million bushels, with a season-average soybean price forecast of $12.90 per bushel.

Worldwide soybean exports decrease by 0.4 million tons to reach 168.4 million, with reduced U.S. exports partially compensated by increased shipments from Brazil and Ukraine. Imports see a decline in Pakistan, Thailand, the EU, and Indonesia. In contrast, China's imports for both 2022/23 and 2023/24 are raised due to heightened crush demand and substantial shipments from Brazil expected to persist into the upcoming marketing year. The global soybean ending stocks also experience a decrease of 0.2 million tons, reaching 119.2 million.

Soybean futures surged in anticipation of a decline in inventories at the beginning of September, as estimated by a Reuters poll. Harvest progress in the U.S. was positive, with 12% of soybeans already harvested, but concerns arose over declining crop conditions, impacting yield estimates. The market anticipated a decline in soybean stocks from the previous year. European Union soybean imports for the 2023/24 season showed a 2% increase compared to the previous year.

An analysis suggested a bullish outlook based on recent rebounds from August support levels. The recommendation was to go long on soybeans at around $1,300 with a stop-loss below the late June low, targeting a potential profit around $1,400.

Data for Technical Analysis (5H) CFD US Soybeans Futures - Nov 23 (ZSX3)

Resistance : 1304.38, 1305.41, 1307.08

Support : 1301.04, 1300.01, 1298.34              

5H Outlook

Source: Investing.com                                                  

Buy/Long 1 If the support at the price range 1294.04 - 1301.04 is touched, but the support at 1301.04 cannot be broken, the TP may be set around 1305.17 and the SL around 1290.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1304.38 - 1311.38, TP may be set around 1323.00 and SL around 1297.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1304.38 - 1311.38 is touched, but the resistance 1304.38 cannot be broken, the TP may be set around 1300.80 and the SL around 1315.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1294.04 - 1301.04, TP may be set around 1288.00 and SL around 1308.00, or up to the risk appetite.       

Pivot Points Sep 28, 2023 02:13AM GMT