Pay attention to key data in February, the soybean market may usher in new changes

CBOT soybean futures have fallen $2 since mid-November, and the price outlook continues to change. Will there be a recovery?

What happened?

Ending two years of tight U.S. soybean ending stocks and rising prices, CBOT soybean futures prices have lost their appeal. While current U.S. soybean ending stocks remain historically low, they are up from a year ago, while South American soybean supplies are also ready for harvest. The USDA's January report increased total U.S. supplies, with ending stocks now at 280 million bushels, up from an estimate of 245 million bushels in the December 2023 USDA report. The real concerns in the market are the bumper soybean harvest in South America and high global soybean inventory levels. Global soybean ending stocks were 114.6 million tons, an increase from 101.87 million tons a year ago.

from a marketing perspective

Remember, people's opinions often drive price movements. The current view is that the world will have enough soybean supplies, which is why prices are falling. Unless there is a shift in perception that soybean supplies suddenly become tighter, CBOT soybean futures prices may have a hard time rising. Looking ahead, traders will be closely watching for signs of improvement in U.S. soybean demand, if any. U.S. soybean crushing demand is likely to continue to grow. However, U.S. export demand for soybeans is likely to decrease under pressure from huge soybean supplies in South America. Long and short trades will begin to play into the potential U.S. soybean planting area in the spring of 2024.

be prepared

In February, there may be some unexpected information. At 4 a.m. Beijing time on February 2, the U.S. soybean crushing report will be released, which will show whether the demand for soybean crushing has increased.

The USDA’s monthly report, which will be released at 1 a.m. Beijing time on February 9, will answer several questions:

Will there be any changes to U.S. soybean demand or ending stocks?

Will USDA lower Brazilian soybean production figures?

Will soybean production increase in Argentina?

Also keep a close eye on China's soybean import needs.

Then comes the USDA Outlook Forum on February 15-16, which will release preliminary data on U.S. grain acreage and demand. Although not an official USDA report, the market has begun to regard it as one of the important reports.

Funds hold large net short positions, and current market sentiment has turned negative. A glimmer of good news can trigger liquidation of positions and a significant price correction. However, a lack of positive news could keep CBOT soybean prices trending sideways or down in the short term.

(The above content comes from the latest analysis report by Naomi Blohm, an analyst at Informa, a private analysis agency)

Article forwarded from: Golden Ten Data