Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets, visit futures-research.com for your free 2 week trial!
The soybean market started the day yesterday on a slightly firmer note with traders crediting the modest strength to continued drought in Argentina. However, that strength quickly dissipated as fund selling and weakness in wheat pushed the entire complex lower and then sharply lower. Traders said that selling by spreaders in soybeans versus corn was also a major factor in the sell off along with the realization that weather in major growing areas in Brazil has greatly improved even as crop conditions in Argentina have deteriorated. Prices were marginally higher in soybeans to start the overnight session, but the March contract lost ground later in the session. Basis levels were mainly steady for soybeans in the interior yesterday with some spot firmness noted. Light farmer selling was said to be the main feature under much-improved weather conditions versus last week. Feed makers in South Korea reportedly bought 55,000 tonnes of soybean meal today with no origin reported so far. The USDA will issue its Export Inspections Report today. Demand for palm oil is said to be weak again today, continuing the trend so far in January. India has said that it does not plan to tax palm oil imports despite domestic pressure to do so from domestic producers of edible oils.
WEATHER: In Brazil, dry conditions returned across much of the soybean belt over the past 24-36 hours with mostly dry weather forecast through tomorrow with the exception of the extreme north. In Argentina, weather was also dry over the past 24-36 hours with more of the same forecast through Saturday. Scattered showers are expected on Sunday. Temperatures are expected near normal through Thursday with above normal temperatures expected starting on Friday. In the US, moderate temperatures and limited to no snow is expected through Friday with below normal temperatures forecast for the weekend.
TODAY’S GUIDANCE: Weather forecasts in Argentina remain in line with yesterday’s ideas, that is to say, mostly dry all week with above to much above normal temperatures. The soybean complex is clearly searching for direction. Light farmer selling continues to be a support below the market, but it is support that could vanish on a test of the recent highs. Continued weather stress in Argentina is perhaps the best support at present, but greatly improved rainfall in southern Brazil partially counterbalances this factor as does the prospect of higher acreage in the US if soybeans regain their recent strength versus corn.
