No signs of a short-term low in Soybeans

August 29, 2016 6:20AM CDT

There is no sign of a short term low as traders see higher production ahead which is likely to more than offset any adjustments higher in demand. The market closed under $9.73 which leaves $9.14 as the next downside target.    The market closed lower on Friday but managed to bounce off of the lows ahead of the Pro Farmer tour results.  Pro Farmer pegged the US soybean yield at 49.3 bushels/acre which is higher than the USDA estimate for August and it appears that the weather is favorable for even higher yield ahead.  If we plug in the Pro Farmer tour yield, ending stocks increase to 361 million bushels as compared with the current USDA estimate of 330 million bushels.  Historically, Pro Farmer has underestimated yield.  November soybeans closed down 37 cents on the week, with severe technical damage done to the chart.  Chinese soybean auction results had just 97,222 tonnes sold out of 600,000 tonnes offered.  There are also longer-term concerns with future production as very cheap prices which are well below the cost of productions for corn and wheat and a historically wide soy/corn ratio might point to a significant drop in corn acres next year and higher soybean acres.  Selling resistance comes in at 981 and 990 with 943 and 914 as next downside targets.

Soybeans Daily

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