Sideways Trading Pattern to Continue, Analyst Says
Soybeans ended Friday’s session in the middle of a rather wide daily trade range, settling 6½¢ higher for the day. For the week, the market gained 5¾¢ while trading in a 37¢ range. Friday’s strength was derived from strong weekly export numbers as well as spillover strength in the corn and wheat market. Corn and wheat are being driven higher by fund short covering.
Soybean sales through last Thursday came in at 1,417,796 metric tonnes. This was viewed supportive as it was above the 900,000 to 1,200,000 tonnes the trade had been expecting. The USDA’s current export goal is 2.025 billion bushels. This would be a new record and 25% over the five-year average. Year-to-date sales are currently 19% over the five-year average. Over the past four weeks, the pace of sales has been making up for the slow pace we had earlier in the year. Sales are now running 31% over the five-year average.
This recent sales pace needs to continue to justify the USDA’s current goal. We would look for the current sideways trading pattern to continue as ideas that big crops will be getting bigger will offset strong demand for the beans we are seeing. Producers should be active sellers on rallies toward the $10.00 level while end-users should increase coverage on moves to the $9.00 level.
This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale Inc.’s 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.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Allendale Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.