Big crop in Soybeans, especially if yields adjusted higher next week

November 4, 2016 8:53AM CDT

The short-term trend looks to remain down as the focus shifts away from very strong demand (already reflected in the US and world supply/demand reports) to the potential for a significant jump in supply if yield is adjusted higher.  January soybeans are already down as much as 48 cents off of the October 27th peak and very strong demand news yesterday resulted in a bounce of just 3 cents on the day.  US exporters announced 120,000 tonnes of soybeans were sold to China.  Weekly export sales came in at 2.574 million tonnes which was the highest of the marketing year but lately the trade has discounted big sales and flash sales announcements and has focused on a potential increase in supply.  Informa joined the club and estimated soybean yield at 52.4 bushels/acre, up from their previous estimate of 51.6 bushels/acre.  A 52.4 yield with unchanged demand numbers would put ending stocks at 478 million bushels.  This compares with 197 million bushels this year.  The South American weather continues to be favorable other than some wet areas in the northwest area of Beunos Aires and northern La Pampa in Argentina.  Speculative longs will probably stay with the bulk of their longs until trend or above yields in Brazil and Argentina look likely.

Without help from outside markets, soybeans look vulnerable to further long liquidation selling ahead of the USDA report next week.  Resistance at 9962 with support at 9746 and then 9640.

 

 Soybeans Daily

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.