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A neutral-to-bullish soybean outlook

Agriculture.com Staff 02/10/2016 @ 2:45am

Soybeans: Today's action was choppy and thin. In fact, the trade volume was comparable to holiday trading coming in with a volume of only 36,353 in the May contract. Today saw the release of two acreage estimates. First, was our acreage estimate of 79.10 million acres. That comes in 1.7 million more acres that what we saw last year. A second private estimate was released during trading that came in at 78.63 for a 1.2 million increase.

Many in the trade were likely looking for a larger number from that second estimate. After that was released, there was a small recovery and then a larger recovery on the close. Again, in small volume it would not take much fund buying to give us that late day bounce. This should not be looked at as late fund buying. It is more likely that a few big traders may be looking for disappointing yield numbers from South America over the weekend. In the end, beans made it through tough outside markets and a bearish day of acreage reports while closing higher. What we still need to see next week is a higher move on rising open interest to see a longer term bullish run. Next week we will watch US weather and South American harvest numbers for our direction. This past week we did break a down trend line to close the week strong. All of this happened without much help from fund buying. Just imagine where we could go if they were to step back into grains.

Direction: We remain neutral to slightly bullish. There was early choppy trade with late buying found on thin volume. Beans will eventually need fundamentals backing it up or it will give up ground soon...Ryan Ettner

Working Trades: · (03/01) Sold May 930 put/sell May 1030 call 32 3/4, risk 58, objective 0. Closed 20. · (03/18) Bought May 954, risk 942, objective 977. Closed 961 3/4.

***Disclaimer*** The commentary and trades below are derived from technical indicators provided in our Allendale Advanced Charts pages and may not correspond with the fundamental commentary above.

Advanced Charts Direction: Beans settled the week above the 50 day MA, but still well within the current trading range. The 38% retracement level is still providing solid resistance near 975. We are short from 960 since its near the top of the range…Monica Moehring

Vital Technical Indicator: The next projected major turn day for soybeans is March 23, soybean meal is March 26, and soybean oil is March 23.

Closing Cattle Commentary

Live Cattle: Cattle futures certainly closed disappointingly today. Both June and August futures made strong gains early on but closed almost unchanged. Based on this close it is likely next week you will hear people talking about a potential top. In discussion with one reporter this afternoon, he raised an old adage that applies to this market. "A bull must be constantly fed but a bear can take care of himself." That is a phrase used to describe how bull markets must be fed a constant stream to good news. For the past weeks we have had that stream of news. Hopes on exports, poor growing conditions in feedlots, and strong wholesale beef has been the talk almost every day. This market has surpassed pretty much everyone’s expectations for spring pricing.

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