Archive for the ‘Soybean Futures’ Category

Not even bird-flu outbreak will keep the Chinese from purchasing their biggest food import – soybeans.  Soybean futures did an about-face after four straight down closing sessions on the outlook of Chinese soybean buying.

The USDA announced yesterday 116,000 metric tons of soybeans sold for delivery in September, but the day before yesterday it was revealed 392,000 tons sold to the Chinese.  Soybean futures have previously sold off on concerns of the bird-flu outbreak in that country.            

“Soybean prices advanced strongly as exporters are reported a surprising pick up in export demand rumored to be out of China,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current soybean futures situation.

The trend for soybean futures is still technically down (same for soymeal, but soy oil remains up).  This is the time of year soybean futures turns up until early summer, so I hops soy oil is leading the way.  I will keep observing in anticipation a clearer picture will unfold.

Things just aren’t going right for Brazil’s soybean exports and the shipping delays are really taking a toll on soybean futures.  A major news organization has reported China canceling nearly 2M metric tons of Brazilian soybeans due to the shipping delays.

It was reported “grain trucks” were backed up for 15 miles to deliver soybeans to the major grain shipping port in Brazil.  This country is expected to supersede the US as the world’s number one soybean exporter, but they’re not going to be able to do that if the product can’t be shipped out…!

Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, had this to say regarding the current soybean futures situation, “…world buyers (are) looking to other countries for imports as an alternative to US soybeans. South American supplies have moved onto the market, and Argentina’s (soybean) crop is expected to begin flooding the market as well.”  Levy adds, “Brazil is still trying to settle delays with shipments but they have a huge (soybean) crop also set to move onto the world market.”

Soybean futures have just rolled back over to a down-trend recently on my daily chart work.  A closer inspection on weekly charts show soybean futures trading in a consolidated sideways pattern since early November.  I’m in no immediate rush to get involved with soybean futures market’s in the near-term.

Soybean futures were poised to test the February 22nd high but have backed off as much as .14 cents from yesterday’s close.  It appears the Brazilian soybean harvest is picking up and a record crop is expected.

The USDA stated last week they expect Brazil to produce a record 83.5M metric tons of soybeans this year, and become the worlds largest soybean exporter – surpassing the US.  In the meantime, Brazilian farmers have harvested 48% of the soybean crop (as of March 8th) which is 2% better than this time last year.

“Demand for US soybeans has been coming under pressure recently due to developments coming out of Brazil. In addition to the  Brazilian (soybean) harvest being ahead of last year’s pace, their soybeans are reaching ports and being loaded on ships without any issues,” said Kevin Riordan, director of commodities research at Capital Trading Group in Chicago, regarding the current soybean futures situation.

The technical trend for soybean futures is up, but more like sideways trading dominates for the past 1.5 months.  With soybean oil futures trend clearly down and soybean meal futures also stagnate of a clear trend, I plan be selective of the opportunities we take.

After last week’s big market reversal following the USDA Crop Production report, soybean futures have bounced back significantly.  The recent news for bullishness is the government announcement of increased US soybean exports to China.

Specifically, the USDA reported today US soybean exporters sold just under 700,000 metric tons last week at this time only after two consecutive weeks of USDA cancellation of soybean & products.  China alone accounted for almost 70% of the recent soybean exports and are on the books for an additional 123,000 tons of soybeans after September.

Jim Allen, licensed futures & Forex broker at Foremost Trading in Geneva IL, had this to say regarding the current soybean futures situation, “As US supplies of soybeans continue to shrink, the global markets continue to show increased demand.  Soybean (futures) should show a bullish trend as it breaks out of this sideways action.”  Allen added, “It all goes back to the age old law of supply vs demand.”

The trend for soybeans is technically down at this time, but after looking at a daily soybean futures chart it has really been “sideways” for a month-and-a-half.  I am awaiting a clearer picture for soybean futures before committing long, or short.

Earlier this month we mentioned weather concerns in the South American soybean growing region…well now there is more of a concern as recent rains are reported to have missed the driest parts of Argentina.  Soybean futures are also said to be rallying on improving demand from China.

The USDA reported US exporters recently sold 120,000 metric tons of soybeans to China.  Soybean futures are up big today on the combination of this news, and up .37c per bushel as of this writing.

Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current soybean futures situation, “China is buying soybeans again as they enter their  new year.  If we see increased usage, and decreased crop yield, we may find ourselves in a real shortage.”  Moreno added, “In my opinion, soybean (futures) may be going higher.”

Soybean futures had just begun a new-found down-trend, but after today’s rally it appears as if it is a resumption of the longer-term UP trend which seasonally doesn’t begin until later next month.  I’ll be on the sidelines of soybean futures until a clearer picture unfolds.

Special circumstances and weather are said to be the culprits of driving soybean futures higher and boosting domestic demand recently.  Shipping delays and dry weather in the Southern Hemisphere are helping soybean futures in a $1.25 counter trend rally since last month.

According to 31 industry analysts, soybean stockpiles will shrink to a nine-year low before the next US soybean harvest.  The USDA claims soybean reserves will amount to 4.2% of actual demand – the lowest since 1965.

“…look at old crop (March Soybean Futures) against new crop (November Soybean Futures) you can see we have a shortage.   The prices are much higher for old crop soybeans compared to new crop,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current soybean futures situation.  Moreno added, “In my opinion, buying old crop soybeans against new crops soybeans will be a good choice.”

The trend for soybean futures are clearly up.  We need for soybean futures to digest tomorrow’s USDA Crop Production report, and hopefully pull-back a little lower, to get back in to this market in a lower-risk position.

The South American soybean crop is being watched closely.  The outlook has changed recently now that warm, dry weather is expected for the first week and a half next month which would reduce soybean crop yields in Argentina while boosting demand for US soybean exports.

A Maryland-based meteorologist is saying the early February expected precipitation won’t be enough after one month of below normal rain, and lack of moisture problems will continue.  For vegetable oil, and animal-feed, Argentina is the biggest shipper of these (soybean-based) products.

“…this current (soybean futures) price increase is weather related.  If we see more dry weather (soybean futures) will move higher yet,” says Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current soybean futures situation.

This is the third month for soybean futures trading sideways.  Recently, soybean futures have broken out to the upside, but before I can get long this market I’d like to see a more clearer picture develop.

The two biggest soybean exporting countries after the US – Argentina & Brazil – are forecasted for rain in the next two weeks.  Soybean futures initially sold-off hard on this outlook and the prospect to boost their yield potential.

The rain predicted in Argentina alone is 2 inches in the next two days which hasn’t seen any outright precipitation in two and a half weeks, and three more storms looming in the next two weeks. The USDA predicts soybean production for both countries to rise well over 25% to a record amount.

“Healthy rains are being forecasted for Argentina and Brazil which is expected to pressure the soybean futures. These rains are coming at the optimal time as the (soybean) crop is entering its critical stage of development,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current soybean futures situation.

The newly emerged soybean trend to the upside has begun, but today’s action puts soybean futures right back at a crossroads.  We are long soybean futures will sell stops in place each day.

The South American soybean production is expected to surpass North America as the world’s largest soybean grower after Brazilian officials stated they expect production to rise to a record this year.  Soybean futures fell today after this realization.

Forecasters in Brazil estimate soybean output to be 25% more this year than the previous year – two million metric tons more than US output.  The Brazilians also note soybean exports to rise by nearly four million tons compared to last year.

“(Soybean) demand continues to shift away from the U.S. and toward South America.  This coupled with favorable weather and good production potential in South America continue to put pressure on soybean (futures) prices,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current soybean futures situation.

The trend in soybean futures is decidedly down, and this month we are seeing lows not since last June.  A major crop report will be released Friday so I’m trying to get short soybean futures under certain conditions.

Soybean futures closed higher today, reaching a two-week high on the outlook of planting delays for South American crops may curb production and raise demand for US supplies.  In Brazil, most soybean growing regions are too dry, and in Argentina the soybean growing fields are too wet – with more precipitation in the forecast.

Compared to last year at this time, when 81% of Brazil’s soybean crop was planted, only 74% has been completed this season.  In Argentina, only 37% of soybean fields compared with 47% last year.

“Soybeans continue to find support after the recent sell off, and much of that is due to the progress of South American planting,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current soybean futures situation.  Craney added, “If we continue to experience problems in this region and if exports remain strong look for soybean prices to find additional momentum higher.”

The trend for soybean futures is DOWN and the market has rallied up to its 18-day moving average.  I am cautiously looking for soybean futures‘ short-selling opportunities in the near-term.