Soybean Prices Remain Under Heavy Pressure, Analyst Says
Soybeans ended the week on a disappointing note, as they could only manage a 3¼¢ gain despite wheat gaining 18¢ and corn 6¾¢.
For the week, the January soybean contract lost 12¾¢. Soymeal was higher, while the soy oil was weaker on the day due to unwinding of the product trade.
The announced sale of 260K of beans to an unknown buyer (200K old crop and 60K new crop) seemed to have little impact on prices. With the export sales so far behind pace (we have sold 38% of USDA’s goal, which is way behind the five-year average of 57%), we will need many more announced sales, like today, to get even close to the USDA’s export target.
Weather is viewed bearish, as it is giving producers an opportunity to catch up on harvest. Most producers we have talked to are still reporting above-average yields, which could lead to another upward revision on next month’s update.
With world ending stocks and U.S. stocks projected to come in at all-time highs, we look for rallies to have a hard time being sustained without a trade deal with China.
The risk is we could eventually test and take out the contract lows without a deal.
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