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Soybean Futures Market Analysis

Free in-depth market analysis on the Soybean futures market written by a professional Soybean futures trader.

August 18, 2014

Soybean Options and Futures Broker, Van Commodities, Inc.

On May, 22 the November Soybean future (SX14) at the Chicago Mercantile Exchange (CME) traded to an intraday high of $12.79 per bushel prior to beginning a sell off that has continued for the past thirteen weeks . Two days after the the USDA Production and Supply Demand Report on August, 12 SX14 hit an intraday low of $10.3875 per bushel, roughly a nineteen percent price drop from the May, 22 high.

The USDA forecast total production of 3.816 billion bushels and an average yield per acre of 45.4, in line with the average market expectation. Traders are now watching the weather to gauge the size of the crop as yields will be decided by the amount of rain and whether favorable temperatures are sustained over the next several weeks. Although expectations are for a large soybean harvest, demand remains strong from both domestic and export markets. The National Oilseed Processors Association (NOPA) reported July Crush data on August, 15 at 119.2 million bushels above market expectations for 115.8 million bushel crush.

SX14 is technically oversold based on several short, intermediate and long term momentum studies. The contract may have some upside over the near term due to the oversold condition, but selling pressure may initially appear between 10.75-11.00 with stronger resistance at 11.10-1130. Over the longer term, as we move into harvest, SX14 may still move toward the $9.50-$9.90 area before the downtrend is over and strong support is found.

May 16, 2013

Soybean Futures Trader, Van Commodities, Inc.

The July soybean future (ZSN13) closed up fourteen and three quarter cents, three and a half cents off the intraday high. ZSN13 may have been supported on talk that the port strike in Brazil over the past few days may not be fully resolved. Export sales for meal were a positive and meal basis levels continue to be supportive of the soybean complex. Soybean exports came in below market expectations and the hand off of demand to the South American soy bean crop appears to be well in place. Gulf basis levels were weaker supporting the idea that export demand has lightened up. 

Several short term momentum indicators are moving into an overbought condition. Over the near term initial resistance for ZSN13 may come in at 14.32-14.36, with further resistance at 14.46-14.61. Initial support may come in at 14.02-14.10, with further support at 13.83-13.94.

May 1, 2013

Soybean Futures Broker, Van Commodities, Inc.

The July Soybean future (ZSN13) has been trading in a dollar and a half range since hitting a low November 16, 2012 at 13.32. Market participants have questioned whether Brazil would be able to get their bean harvest into global markets on a timely basis. The answer appears to be that supplies are being shipped and the lower basis for Brazilian beans will reduce demand for US supplies over the foreseeable future. There is also a possibility for Brazilian Soybean imports into the US market if domestic US basis levels continue to trade at present levels.

ZSN13 scored a reversal day on Monday after trading close to 14.24 on an intraday basis. The contract had become overbought based on several momentum studies on a short term time frame. Initial resistance may come in at 13.82-13.88, with stronger selling at 13.95-14.02. Support for a tradable bounce over the near term may come in at 13.36-13.42.

April 1, 2013

Soybean Futures Trader, Van Commodities, Inc.

The USDA Grain Stocks and Planting Intentions report on Thursday took a toll on traders with a bullish view on the soybean future (ZSK13). The stocks report came in at 999.28 million bushels, roughly 65 million bushels higher than the average of analyst’s expectations. Planting intentions at roughly seventy-seven million acres were about one and a half percent lower than the market was looking for, but many market participants believe that more acres will be added later in the planting season due to double cropping. Export Sales for old crop beans reported earlier on Thursday were also somewhat lackluster coming in at sixty-six thousand tons.

The intermediate term trend for ZSK13 appears to be down, but the speed of the sell off may result in some buying support not to far below today’s close at 1392.50. Momentum indicators on several short and intermediate term studies have rolled over and would be supportive of further selling. Over the near term initial support for ZSK13 may come in at 1380.00-1383.00, with longer term support coming in at 1354.00-1366.00. Over the near term initial resistance may come in at 1404.00-1414.00, with longer term resistance at 1422.00-1429.00.

December 29, 2012

Soybean Futures Broker, Van Commodities, Inc.

The soybean futures contract (SH13) stabilized over the Christmas Holiday’s shortened week, after the prior week’s roughly seven percent intraday high to low fall. News of large Chinese soybean cargo cancellations in the week of December 17 hit SH13 after a multiweek rally and with the contract in a technically vulnerable setup.

SH13 traded within a tight range throughout the four day week of December 24, with uncertainty about future export sales and concerns over the Fiscal Cliff debate resulting in relatively low market participation. Weekly soybean sales of 87,000 tons, reported on Friday, were below expectations of 100,000-300,000 tons. News earlier in the week of a 165,000 ton soybean purchase by China may have ameliorated some concerns of weaker demand for US soybeans in the calendar first quarter of 2013.

The factors investors will be watching for over the coming weeks include worries over water levels on the Mississippi, and the potential for transportation interruptions for export orders; weather forecasts for the South American grain growing regions; the continuing “Fiscal Cliff” debacle in Washington and the USDA Crop Production and Grain Stocks number to be released January 11, 2013 at 11:00 Central Time.

The weekly nearest futures chart scored an inside range during the Christmas Holiday shortened week. The price action could indicate one of two things; either that the recent selling pressure may be subsiding or on the other hand that traders in aggregate are uncertain about future market direction.

Over the intermediate term the trend for SH13 appears to be down, but traders may look for better trade location to sell soybeans over the near term. SH13 may trade within a range of 13.55-15.20 leading up to the January 11 USDA data release. Initial support for SH13 may come in at 13.90-13.98 with stronger support 13.55-13.62. Initial resistance may come in at 14.50-14.60 with stronger selling at 14.98-15.20.

Soybean Trader, October 28, 2012

The Soybean market has traded down from historic highs of $17.90 per bushel over the past month and half as prospects for harvested soybean yields improved from September’s expectations. The unknown for traders at this point is whether the strong demand for U.S. soybeans will continue. U.S. export orders continue to be strong even though last weeks numbers were lower than the market expected. With the slow start to the South American planting season it would seem that U.S. soybeans will continue to find good demand on any price weakness. Traders are watching the South American weather situation closely as so far the hoped for early planting has been delayed somewhat. If the situation continues into November that would delay the South American harvest in spring and leave U.S. beans well supported over the intermediate term. 

With first notice day fast approaching on October 31, 2012 for the November Soybean contract the January futures (SF13) will become front month.

The soybean contract basis January (SF13) appears to be range bound in the near term. Short term momentum studies are mixed with some being neutral and one or two being overbought. On an intermediate term basis momentum studies are mixed. SF13 should find initial support around 15.46. If that level does not hold 15.38-15.41 and then 15.31 should find buyers. Initial resistance may appear around 15.77 with 15.87-15.98 attracting further selling.

Soybean Futures Broker, May 8, 2012 

Soybean futures were down across the board today with the largest losses in front month, old crop contracts. The July contract (SN12) suffered the biggest drop of around 27 cents. Market participants were taking advantage of the $1.00 move since April 18th, prior to the USDA supply demand data May 10, 2012, to take profits and set shorts.


SN12 $3.08 rally since the end of January, on the back of declining supply from South America and continued export demand for US crop, resulted in an overbought condition based on several momentum studies. The record long position reported for Fund Traders and other Speculators in the May 01, 2012 Commitment of Traders Report (COT) and a high level of open interest created fuel for a bout of profit taking, starting with the outside reversal day down on May 02. Monday’s weekly crop progress report showing soybean planting at 24% complete versus the 10 year average of 14% and the negative outside market features in today’s trade were added factors in the downside action for the bean complex.

SN12 appears to be taking a breather based on an overbought condition and the risk created by the unknown supply demand data to be released by the USDA May 10, 2012.

Average expectations for 2011/12 ending stocks for old crop beans are 215 million bushels down 35 million bushels from the previous report and 2012/2013 ending stocks of 165-172 million bushels. Initial support for SN12 comes in at 1426 with more significant support seen at 1405-1416.

March 20, 2012

Grain Trader, Van Commodities, Inc.

Although there was no real negative news for traders to hang their hats on, the soybean market suffered a technical reversal day on the Chicago Mercantile Exchange. Soybeans appear to need a break from their relentless march to the upside. Technically, the May soybeans futures contract (SK12) looks overbought after their $2.63 move to the upside from their mid December lows. SK12 have retraced 75% of the sell off from the August 2011 highs to their mid December lows. The reversal day in SK12 today, appears to be a tradable short term top with the possibility of further downside action. First support should come in around $13.25 with better support around $12.90 - $13.00. 

March 06, 2012

Commodity Broker, Van Commodities, Inc.

Although soybean futures came into the US trading session on a weak note; due to a softening in Global economic expectations, weaker financial markets and a strong dollar, the soybean bulls took control of the market shortly after the US open and never looked back. Even with corn and wheat trading weaker throughout the day soybeans traded to their own beat. Old crop beans closed up from 8-10 ½ cents and contracts from September out closed up 2- 5 cents.

The soybean market is technically overbought, on a momentum basis. The front month, May contract (SK12), is trading up against a fibonnaci number around the 1336 level.
On March 09, 2012, the USDA Supply/Demand Report is due out. It would not be surprising to see profit taking prior to the release, but the downside for old crop soybeans appear to be limited. Whether the pullback comes before or after the report, minor 1st support for the SK12 should come in around 1305 on a short term basis. If the market is as bullish as it appears good support should come in between 1280-1290, barring any major surprises in the USDA report.