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332150

Shift to cool and wet weather next week may ease yield concerns 

The highest close since July 29 for November soybeans is a positive technical development ahead of the key USDA Supply/Demand report this morning. Solid demand news for meal and continued concerns with the short-term weather pattern lent support to the market yesterday.

For the 1- to 5-day forecast, there are light scattered rains for Nebraska, eastern Iowa, and Minnesota, with no rain in the forecast for South Dakota, southwestern Minnesota, and parts of Iowa. There is also no rain for central Illinois. The 6- to 10-day models show normal precipitation and below normal temperatures for all of the Corn Belt. The 8- to 14-day forecast models show below normal precipitation for the Dakotas, Minnesota, and parts of Iowa and Nebraska. December soybean oil also traded sharply higher yesterday, reaching their highest level since June 29. Exporters announced the sale of 103,400 tonnes of U.S. meal sold to Mexico. 

The weekly Export Sales report showed that for the week ending August 4 net soybean sales at -66,710 tonnes (cancelations) for the current marketing year and +477,241 for the next marketing year for a total of 410,531. Cumulative sales for 2022/23 have reached 27% of the USDA's forecast for the marketing year versus a five-year average of 19%. Meal sales came in at 90,887 tonnes for the current marketing year and 311,174 for the next marketing year for a total of 402,061. Cumulative sales for 2021/22 have reached 92% of the USDA's forecast versus a five-year average of 95%. Oil sales came in at 642 tonnes. Cumulative sales have reached 89% of the USDA's forecast versus a five-year average of 94%. 

For the monthly USDA Supply/Demand report today, the average trade expectation for U.S. soybean ending stocks for 2021/22 is 226 million bushels, with a range of expectations from 210 to 255 million. This would be up from the 215 million in last month's report. Ending stocks for 2022/23 season are expected to come in near 230 million bushels (175 to 320 range), which would be unchanged from last month. Yield is expected to come in at 51 bushels per acre (49.9-52.0 range) versus 51.5 estimated in the July. World 2022/23 ending stocks are expected to come in near 99.5 million tonnes (97.5-103.1 range) versus 99.6 million in July. 

MARKET IDEAS

For the USDA report today, traders will be focusing primarily on the yield number, with some focus on a potential adjustment higher in acreage. Close in support for November soybeans is at 1436 1/2. Supportive news would leave 1471 1/2 and 1516 1/4 as the next resistance levels. On bearish news, 1388 3/4 would likely be key support, with additional critical support at 1365. December soybean oil support is at 66.85 and 65.61, with 69.79 and 72.13 as resistance. Key support is back at 63.92. December soybean meal support is at 408.80 and 402.40, with resistance at 431.70 and 439.00. 

For a free trial of The Hightower Report’s Daily Comments and Weekly Market Letter, visit hightowerreport.com, call 800-662-9346, or drop us an email at hightower@hightowerreport.com

About the Author: Terry Roggensack, a founding principal of The Hightower Report, analyzes the livestock, grain and soft markets. Roggensack has over 30 years of experience in the commodity and financial futures industry. In the late 1980s, he briefly lived in London as acting director of a new London clearing firm. Prior to that, Roggensack was director of research at Stotler & Company.

Editor’s Note: This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. Any information or recommendation contained herein: (i) is not based on, or tailored to, the commodity interest or cash market positions or other circumstances or characterizations of particular investors or traders; (ii) is not customized or personalized for any such investor or trader; and (iii) does not take into consideration, among other things, risk tolerance, net worth, or available risk capital. Any use or reliance upon the information or recommendations is at the sole discretion and election of the subscriber. The risk of loss in trading futures contracts or commodity options can be substantial, and traders should carefully consider the inherent risks of such trading in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of The Hightower Report is strictly prohibited.

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