Outside macros such as crude oil futures, DJIA and US dollar continue to override fundamentals of positive demand for US soybeans and an outlook at present, which suggests additional corn acres for 2009. Anticipate soybeans to continue to follow the cumulative action of the US dollar, DJIA and crude oil futures trade. Bearish to soybeans is beneficial South America weather. Also supportive to US soybean futures is news within the # one soybean producing region of China that its soybean crushers are contemplating imports of soybeans to restart closed processors, which has had its margins turn red as a result of high priced domestic soybeans.
A very cloudy outlook within Argentina as although USDA anticipates soybean production to increase 9.3%, Argentina farm groups are becoming increasingly bothered by the lack of exports and has asked its government to weaken its currency.
Our nation's largest poultry producer, Pilgrim's Pride has announced it seeks bankruptcy protection and will continue operations and not liquidation. Of all the soybean meal produced in the US for feed use, poultry use the most at 50% and are the number 2 user of corn for feed use.
Allendale's Soybean price projections based on $60/barrel crude oil, range from $8.00-$11.00. Based on $40/barrel crude oil, Allendale's price range projection for soybean is $6.50-$9.50.
Soybean Technical Commentary: January soybean futures need to close above 8996 in order to turn downward momentum to up. A weekly close above 1650 Chinese Ringgit's is needed to potentially suggest a seasonal bottom. The next projected major turn day in store for soybeans is December 11, soybean meal December 11 and December 17 for soybean oil.
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