Rains in Argentina next week could normalize yield outlook for Soybeans

December 16, 2016 4:10AM CST

The ability to hold in the 3-4 week consolidation above 1020 for January soybeans is impressive.  This will become more difficult next week if the shift to a wetter weather pattern for Argentina verifies, and the focus of attention shifts to US planted area for next year.  Soybeans are cheaper to plant than corn, and price relationships with corn, wheat, and cotton favor shift to soybeans.  US ending stocks are at a 10-year high, and world stocks at a record high.  January soybeans held support at 10184 yesterday and rallied.  Demand news, however, remains bullish as well and this is keeping fund traders as active buyers.  Weekly exports sales came in at 2.008 million tonnes vs. trade estimates of 1.2-1.6 million tonnes.  Informa analytics estimated soybean acreage for 2017-18 at 88.89 million acres compared to last months 88.6 million acres.  This is 5.19 million acres larger than last year.  China’s currency fell .6% yesterday, reaching the lowest level since June 2008 which in turn is increasing the cost of imports.  There is speculation that the Chinese have been buying soybeans aggressively in anticipation of further weakness in the Yuan.  As of December 8 th , cumulative soybean sales stand at 80.8% of the USDA forecast vs. the 5-year average of 41.7%.  Support is at 1005 and resistance comes in at 1036 and 1041.

Soybeans Daily

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