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Bullish the soybean complex

Agriculture.com Staff 02/09/2016 @ 2:30pm

For The Month: for the month of January, May corn futures value increased 8%, May soybean futures value increased 18.8% and July CBOT SRWW value increased by 14.5%. By comparison, April crude oil futures value increased by 11%.

For The Week: May corn futures closed up twenty one cents (+4%) per bushel vs last Friday's closing price, May soybeans up ninety eight cents (+7%) July CBOT wheat up fourteen cents (+1.4%), July KCBT wheat futures up twenty five cents (equaling the previous week) (+23%) and July MGEX up fifty cents (+3.8%)

Technicals: Old and New crop corn and soybeans and new crop wheat. For the short term trader, Allendale uses its own unique custom Moving Averages to monitor price momentum, define key support and resistance levels as well as advise where key pivot points are located when bulls may turn bearish and bears to turn bulls. We also include last weeks closing price for the weekly chartist as we draw closer to the end of the week to anticipate the possibility for futures to have a positive weekly close or if weakness is ensuing.

Observation: be aware of how close the key short term Moving Averages are for old crop corn futures. July CBOT closes below both short term Moving Averages and now used as overhead resistance.

Historical Price Trends: best odds for the week of March 3, according to our HPT page are for soybeans and cattle. Over the most recent ten years, odds of 80% for higher soybean futures than were they closed on Friday. Odds of 70% favor a higher close next Friday for Live Cattle than where they closed this Friday. Please see the HPT page for the complete list.

March Weather: the 30 day outlook according to Drew Lerner of World Weather Inc forecast below average temps for the major Midwest, above normal precip for an already saturated eastern Corn Belt and normal to slightly above normal precip in the west Corn Belt.

Soybean Fundamentals: funds buy crude oil as a hedge against energy inflation. Funds buy soybean oil as a hedge against food inflation. Bullish to soybeans is an active export pace for US soybean oil. Bearish to soybeans is South America weather for good harvest conditions for Brazil, good growing conditions for Argentina soybean pod fill. China announces it will expand 2008 oilseed acres by 7%.

Cash: Allendale is not recommending to sell remaining 2007 soybean harvest as this juncture and prefers to respect the long term trend in futures and aware of the best odds when the national soybean price has historically hits its peak cash price.

US Census Bureau: The Census Bureau suggest 160.28 million bushels of soybeans were crushed vs pre release trade estimates of 159-163 million bushels. The January crush compares to year earlier levels of 155.3 million bushels and Dec 2007 levels of 162.4 million bushels. In order to meet USDA's 2007/08 final soybean crush target of 1.83 billion bushels, the January soybean crush had to be a minimum of 157 million bushels. Based on the present cumulative crush data, USDA needs to increase it's marketing year target by 15 million bushels, further reducing projected end stocks.

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