Soybeans traded down overnight and extended losses through the day on Thursday. The Weekly Export Sales Report reflected net cancellations of 22.5 Mil Bu for the week ending Jan 3rd, with large cancellations from both China and unknown destinations. The cancellations triggered fund selling of an estimated 12,000 soybean futures. In the product markets, funds sold 4,500 soymeal and 4,000 soyoil futures.
The Buenos Aires Grain Exchange’s weekly crop condition update showed that 54% of the soybean crop rated GD/EX versus 11% last year. 75% of the crop was blooming (5 yr-avg 80%) and 47% of the crop was setting pods (5 yr-avg 49%). The Exchange held their planted area total at 17.7 Mil Ha, with a crop size of 53 MMTs versus the USDA’s Feb estimate of 55 MMTs.
Key support for March soybeans is just below the market at a 100-day moving average near $9, though a deeper correction back to the January lows could unfold if funds continue to sell. We look for broad-ranging trade to continue and look to add to sales on rallies. The market will look to US/China trade progress for soybean pricing on Friday.
March soybeans should hold $8.90-9.00.