Soybeans weekly: October 14, 2018

SOYBEANS FUTURES ACTIVITY

Today’s soybean futures

Today’s soybean oil futures

Soybeans – CFTC position of traders

Contracts of 5,000 Bushels

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Comments:

• Neutral soybean futures: Nov-18 futures seem to be trading inside the range $8.40 – $8.70 with support and resistance lying at those levels, respectively. The 50-day moving average will add more support at $8.58. Volatility is down, as there is no news on the trade front. RSI is 54.1 percent.
• Soybean ending stocks at a record: Despite a bullish reaction to yesterday’s WASDE report, soybean fundamentals remain bearish. USDA once again increased ending stocks to a record 885 million bushels. Acreage also saw a decrease of 0.3 million acres, however, the decrease was offset by an increase in yield to 53.1 bushels per acre (bpa). Despite a slight drop in production due to lower harvested acreage, we are still looking at a sizeable crop.
• Outstanding soybean export sales down 16 percent from last year: For the week ending Oct. 4, net soybean export sales were just 439,700 MT, reflecting 187,900 MT of reductions from China. Outstanding sales totaled 16.6 MMT. Shipments are behind last year’s pace but still good for the start of the season, and cumulative exports totaled 3.9 MMT. October and November are very important months for soybean exports, typically driven by trade with China. After a small export volume during the first week of September, the U.S. has not exported any more soybeans to China, and outstanding sales to China are just 1.0 MMT compared to last season’s 8.4 MMT.

Cumulative soybean exports to China by season

• China’s soybean imports drop in September: As the trade dispute continues, China’s demand for soybeans has dropped, perhaps as they reformulate and find different alternatives. Soybean imports for the month of September were 8.01 million metric tons (MMT), down from the 9.15 MMT imported in August and below the 8.11 MMT imported last year. China continues buying Brazilian soybeans to meet their needs though supplies are getting low. Brazil has sold 92.9 percent of the 2017/18 crop compared to 83.7 percent a year ago.