A strong US dollar and a bearish weather forecast is not good combination for the soybean market. With hefty rain totals in the next 5-day forecast for the Dakotas, Minnesota, Nebraska, and Iowa, the weather outlook is shifting from “concerns for expanding drought” to “near ideal weather at the ideal time” for the soybean crop. Keep in mind that if the weather happens to improve from the August 1 yield outlook by the USDA of 49.4 bushels/acre, to 49.9 bushels/acre (which is still down 4.2% from last year), and up from 370 million this year and 197 million last year. November soybeans bounced 4 ¾ cents on Friday, and this left the market down 11 ¾ cents on the week. US exporters announced the sale of 120,000 tonnes of soybeans to China with 60,000 tonnes for the 2017-18 crop year. Open interest in soybeans went up 8,804 contracts Thursday and up 7,338 on Friday which might indicate new shorts entering the market. On top of the bearish weather outlook and the bearish USDA report news last week, many traders see the USA’s Farm Service Agency acreage data release on Thursday indicating that actual soybean acreage could be up nearly 1 million acres from the current estimate. Next downside target for November Soybeans (see below) is 940 ¼ and next area of resistance is around 949 ¾ and 952 ¾, while first support hits today at 940 ¼ and below there at 934.
Nov ’17 Soybean Daily Chart