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Soybean Futures (Jan 2025)

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Soybean Update 🌱Fundamental Data👇 🌱Soybean Marketing Year Progress (23/24) ▓▓▓▓░░░░░░░░░░░ 23.76% Export Inspections 🚢➡️🌎 1,609,413 Metric Tons ⬇️ 330,666 Metric Tons week vs. last week ⬇️ 420,260 Metric Tons this week vs. last week ⬇️ 319,437 Metric Tons this week vs. 5-Year Average This Week Export Sales🗺️🫰 29,054,927 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 6,928,917 Metric Tons this week vs. this week last year Price Sentiment (Community Polling)📊 Bullish 🟩🟩🟩🟩🟩⬜️⬜️⬜️⬜️⬜️ 47% Neutral 🟫🟫⬜️⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 18% Bearish 🟥🟥🟥⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 24% Fund Net Position💰 Chicago Soybeans: +87,913 Contracts (Position as of 11/14) Funds have been adding to their net position 5 weeks in a row (Fund position will be updated on 11/27 due to Thanksgiving holiday) Noteworthy News / Trends 🆕 🔴 Brazilian production is still seen at a record +160 million metric tons, according to analysts 🔴 Import interest into China (from US) is considerably weak, even when considering recent China purchases (+ Unknown) 🔴 The spread between January-March futures continues to widen (carry is not bullish) 🟢 5-day precipitation is mixed for Brazil - rains in the forecast in the southern states, but lack of rain in the northern growing regions 🟢/🔴 Logistics at the ports of Brazil are mounting (congestion). For US Logistics the constraint appears to be the Panama Canal which has announced a reduction of the number of ships that will be able to transit through the canal daily from 24 currently to 18 in February 2024. Fund Net Position💰 Chicago Soybeans: +87,913 Contracts (Position as of 11/14) Funds have been adding to their net position 5 weeks in a row (Fund position will be updated on 11/27 due to Thanksgiving holiday) Commentary & Technicals💹 Not much to add that has not been explained already. Watch the following levels 👇 🟢 Upside Targets: 13.78, 13.89, 13.98 🔴 Downside Targets: 13.27, 13.15, 13.00 Investment Risk Disclaimer⚠️ This information is provided for informational and educational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. The views expressed are those of the author and do not necessarily represent the opinions or advice of our firm. Futures, options, and over-the-counter derivatives involve a high degree of risk and may not be suitable for all investors. Past performance is not indicative of future results. Investments or strategies mentioned herein may not be suitable for you. The information contained herein does not take into account the particular investment objectives, financial situations, or needs of individual users. Before making any investment decision, you should perform due diligence and consider seeking advice from an independent financial or investment advisor. All investments involve risk, including the possible loss of principal. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. We do not guarantee any outcomes regarding your use of the information provided.
CBOT:ZSF2024
by GrainStats
🌱 Soybeans - 🔥Brazil and Argentina 💵Fundamental Data👇 🌱Soybean Marketing Year Progress (23/24) ▓▓▓░░░░░░░░░░░░ 21.77% Soybean Harvest Progress 🚜➡️🌱 ▓▓▓▓▓▓▓▓▓▓▓▓▓▓░ 95% Export Inspections 🚢➡️🌎 1,666,467 Metric Tons ⬇️ 516,368 Metric Tons week vs. last week ⬇️ 941,965 Metric Tons this week vs. last week ⬇️ 549,183 Metric Tons this week vs. 5-Year Average This Week Export Sales🗺️🫰 28,159,427 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 4,933,183 Metric Tons this week vs. this week last year Price Sentiment (Community Polling)📊 Bullish 🟩🟩🟩🟩🟩🟩⬜️⬜️⬜️⬜️ 52% Neutral 🟫🟫🟫⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 28% Bearish 🟥🟥⬜️⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 13% Noteworthy News / Trends 🆕 🟢 Brazilian Soybean crop continues to suffer through drought and heat stress conditions. Some of the crop is even being replanted as Cotton. (check our Twitter for more info) 🟢 Precipitation in Brazil is well below normal from a low of 13% of normal to a high of 70%, with most around the 30-40% range as far as November precipitation is concerned. 🟢 Funds have been adding to their net long position for five weeks in a row. 🟢 US Crush margins continue to show strength 🟢 The US had the largest weekly sales of Soybeans in +10 years 🟢/🔴 Logistics at the ports of Brazil are mounting (congestion). For US Logistics the constraint appears to be the Panama Canal which has announced a reduction of the number of ships that will be able to transit through the canal daily from 24 currently to 18 in February 2024. 🟢/🔴 It’s too early to tell what happens with the Argentine elections, but one could assume that Milei winning would be bearish Soybeans as he vows to dollarize the economy. This would pave the way for Argentine farmers to sell their grain for Dollars instead of the hyperinflated Argentine Peso. (Basically the market will not encourage hoarding of grain off the market anymore) 🟢/🔴 5 Day forecast is calling for rains in Brazil in key areas that need the rain the most. Will they hit? That’s TBD. Fund Net Position💰 Chicago Soybeans: +87,913 Contracts (Position as of 11/14) Funds have been adding to their net position 5 weeks in a row Commentary & Technicals💹 All attention in the grain and oilseed markets continues to be pointing to two things in South America. 1. The ongoing heat and lack of rain in Brazil affecting Soybean production 🔥 2.The presidential race in Argentina which could structurally shift everything in the Argentine economy IF Javier Milei wins 💵 These all come at a time when the US farmer will largely remain absent completing harvest as well as taking much needed time off during Thanksgiving. We believe then based on the above that we may experience heightened volatility and lessening liquidity as we start pricing in which portion of the matrix becomes the most probabilistic outcome (Rain/Drought, Javier Wins/Loses). Watch the following levels 👇 🟢 Upside Targets: 13.62, 13.87, 13.98 🔴 Downside Targets: 13.36, 13.14, 13.00 Investment Risk Disclaimer⚠️ This information is provided for informational and educational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. The views expressed are those of the author and do not necessarily represent the opinions or advice of our firm. Futures, options, and over-the-counter derivatives involve a high degree of risk and may not be suitable for all investors. Past performance is not indicative of future results. Investments or strategies mentioned herein may not be suitable for you. The information contained herein does not take into account the particular investment objectives, financial situations, or needs of individual users. Before making any investment decision, you should perform due diligence and consider seeking advice from an independent financial or investment advisor. All investments involve risk, including the possible loss of principal. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. We do not guarantee any outcomes regarding your use of the information provided.
CBOT:ZSF2024
by GrainStats
Soybean Update 🔥🌱Fundamental Data👇 🌽Soybean Marketing Year Progress (23/24) ▓▓▓░░░░░░░░░░░░ 20.53% Soybean Harvest Progress 🚜➡️🌱 ▓▓▓▓▓▓▓▓▓▓▓▓▓▓░ 95% Export Inspections 🚢➡️🌎 1,666,467 Metric Tons ⬇️ 516,368 Metric Tons week vs. last week ⬇️ 941,965 Metric Tons this week vs. last week ⬇️ 549,183 Metric Tons this week vs. 5-Year Average This Week Export Sales🗺️🫰 24,241,071 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 8,056,733 Metric Tons this week vs. this week last year 🤯 (these statistics do not include recent Chinese purchases totaling over 2 million metric tons) Price Sentiment (Community Polling)📊 Bullish 🟩🟩🟩🟩🟩⬜️⬜️⬜️⬜️⬜️ 46% Neutral 🟫🟫⬜️⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 19% Bearish 🟥🟥🟥⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 29% Noteworthy News / Trends 🆕 🔴 USDA Raised ending stock estimates by 25 million bushels (245 million bushels ending stocks) and production by 3/10 of a bushel (49.9 bpa) for the 2023 crop. 🔴 USDA Raised ending stocks of Brazilian Soybeans by 2 million metric tons ( all time high ) 🔴 Drought is receding in the US, but several pockets remain (more important for 2024) 🔴 Panama Canal congestion continues to plague logistics increasing freight costs to navigate through the Panama Canal (most of US Soybeans are exported through the US Gulf and pending destination, may need to use the Panama Canal to get to market) 🔴 Mississippi river levels have receded again and likely will have an impact on shipping costs (Freight up, Basis down) 🟢 China is back in the market for Soybeans buying +2.8 million metric tons, just last week (assuming “unknown” sales are China) 🟢 Soybean meal continues to rally approaching highs not seen since March of this past year 🟢 Brazilian crop continues to suffer through drought and heat stress conditions (check our Twitter for more info) 🟢 Funds continue to add to their net long position Fund Net Position💰 Chicago Soybeans: +68,598 Contracts (Position as of 11/07) Commentary & Technicals💹 Technically speaking, Soybeans broke through the earlier resistance we mentioned last week and settled above it, opening the door for the psychological $14.00 handle. We note this week that the market is mainly being driven by events unfolding in Brazil (drought) and Argentina (Elections & Soybean scarcity). One of which can turn suddenly (weather) and the other is driven by both the political uncertainty in Argentina coupled with Soybean scarcity. All of which could lead to volatile outcomes in the next 2 weeks while the US is out celebrating Thanksgiving. Watch the following levels 👇 🟢 Upside Targets: 13.98, 14.00, 14.20 🔴 Downside Targets: 13.68, 13.60, 13.36 Investment Risk Disclaimer⚠️ This information is provided for informational and educational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. The views expressed are those of the author and do not necessarily represent the opinions or advice of our firm. Futures, options, and over-the-counter derivatives involve a high degree of risk and may not be suitable for all investors. Past performance is not indicative of future results. Investments or strategies mentioned herein may not be suitable for you. The information contained herein does not take into account the particular investment objectives, financial situations, or needs of individual users. Before making any investment decision, you should perform due diligence and consider seeking advice from an independent financial or investment advisor. All investments involve risk, including the possible loss of principal. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. We do not guarantee any outcomes regarding your use of the information provided.
CBOT:ZSF2024
by GrainStats
🌱 Soybeans Going Into Holiday Mode (GrainStats)Fundamental Data👇 Soybean Harvest Progress 🚜➡️🌱 ▓▓▓▓▓▓▓▓▓▓▓▓▓░░ 91% Export Inspections 🚢➡️🌎 2,085,419 Metric Tons ⬇️ 35,012 Metric Tons week vs. last week ⬇️ 500,809 Metric Tons this week vs. this week last year Export Sales🗺️ 24,241,071 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 8,056,733 Metric Tons this week vs. this week last year 🤯 Price Sentiment (Community Polling)📊 Bullish 🟩🟩🟩🟩🟩⬜️⬜️⬜️⬜️⬜️ 46% Neutral 🟫🟫⬜️⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 19% Bearish 🟥🟥🟥⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 29% Noteworthy News / Trends 🆕 🟢 *Huge* export sales this week purchased by China 🟢 US Barge freight has gone down 6 weeks in a row from 1,326% of tariff to 467% of tariff 🔴 CONAB raised Brazil's forecast for Soybean output to 162.42 million metric tons (even in light of the problems with the planting of the crop) 🔴 USDA raised yield forecasts for US crop by 3/10 of a bushel and increased carryout by 25 million bushels 🔴 Panama Canal water level has caused congestion and increased shipping costs as ships "jump the line" to pass through the canal. (end result = increased shipping costs) Funds💰 Funds have reversed their net short position and are long over 23 thousand contracts. (as of 10/31) Soybean Technicals 💹 Soybeans broke the down trend this week, but failed to follow through. Regardless, the price action actually has set a technical level to watch to the upside at @ 13.84, which if broken, could warrant a test of 14.20. Other than that, we do have a trend forming to the upside, the only issue is for new entrants is that we're right in the middle of the range and there is plenty of choppiness to go around. That being said, we advise caution until a clearer picture is known for position taking. What we're watching is continued buying potential from China for the next several weeks and any indication that Brazil's production estimates are to reverse. It is also notable to pay close attention to the elections in Argentina where the opposition party would "Dollarize" the economy, which in turn could lead to Argentine farmers being more relaxed with marketing decisions knowing they would revive dollars instead of the hyperinflated Argentine Peso. Watch the following levels for now👇 🟢 Upside Targets: 13.73, 13.84, 14.00 🔴 Downside Targets: 13.36, 13.10, 12.97 Investment Risk Disclaimer⚠️ This information is provided for informational and educational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. The views expressed are those of the author and do not necessarily represent the opinions or advice of our firm. Futures, options, and over-the-counter derivatives involve a high degree of risk and may not be suitable for all investors. Past performance is not indicative of future results. Investments or strategies mentioned herein may not be suitable for you. The information contained herein does not take into account the particular investment objectives, financial situations, or needs of individual users. Before making any investment decision, you should perform due diligence and consider seeking advice from an independent financial or investment advisor. All investments involve risk, including the possible loss of principal. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. We do not guarantee any outcomes regarding your use of the information provided.
CBOT:ZSF2024
by GrainStats
2
🌱 Soybean Technical Analysis (GrainStats)Fundamental Data👇 Soybean Harvest Progress 🚜➡️🌱 ▓▓▓▓▓▓▓▓▓▓▓▓░░░ 85% Export Inspections 🚢➡️🌎 1,890,227 Metric Tons ⬇️ 735,466 Metric Tons week vs. last week 🤯 ⬇️ 1,030,191 Metric Tons this week vs. this week last year 🤯 ⬇️ 372,103 Metric Tons this week vs. 5-year average Export Sales🗺️ 23,269,073 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 8,281,365 Metric Tons this week vs. this week last year 🤯 Price Sentiment (Community Polling)📊 Bullish 🟩🟩🟩🟩⬜️⬜️⬜️⬜️⬜️⬜️ 39% Neutral 🟫🟫🟫⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 25% Bearish 🟥🟥🟥⬜️⬜️⬜️⬜️⬜️⬜️⬜️ 30% Noteworthy News / Trends 🆕 🟢 US River levels have improved on the Mississippi river (barge freight down 4 weeks in a row) - Positive for basis development 🟢 Harvest is nearing completion in the US (less sell side pressure from farmers) 🟢 Funds have reversed their net bearish bets on soybeans in the past 3 weeks 🔴 Export sales are dismal 🔴 Crush margins backing off 🔴/🟢 Rains forecasts are improving in Argentina, mixed in Brazil Funds💰 Funds have reversed their net short position and are long over 23 thousand contracts. Soybean Technicals 💹 Soybeans successfully broke out of their near term downtrend late last week which has opened the door to higher levels. We currently believe that there is potential to continue higher while also respecting the downtrend in prices since summer. We also note that Soybean futures are stuck right in the middle of the range, so we advise caution as a choppy trade is to materialize with support/resistance being set largely out of the down/up trendlines. What we're paying attention to currently is the export situation in the US being extremely dismal and looking for a bright spot. We are looking at the new crop Soybean/Corn spread which we believe will keep on pricing itself to incentivize farmers to plant more Soybeans next spring. Other than that, Argentina and Brazil soybean development is on the radar on everyone's trade desk. Expect some choppiness! Watch the following levels for now👇 🟢 Upside Targets: 13.60, 13.75, 13.83 🔴 Downside Targets: 13.26, 12.97, 12.70 Investment Risk Disclaimer⚠️ This information is provided for informational and educational purposes only and is not intended to constitute investment, financial, legal, tax or accounting advice. The views expressed are those of the author and do not necessarily represent the opinions or advice of our firm. Futures, options, and over-the-counter derivatives involve a high degree of risk and may not be suitable for all investors. Past performance is not indicative of future results. Investments or strategies mentioned herein may not be suitable for you. The information contained herein does not take into account the particular investment objectives, financial situations, or needs of individual users. Before making any investment decision, you should perform due diligence and consider seeking advice from an independent financial or investment advisor. All investments involve risk, including the possible loss of principal. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. We do not guarantee any outcomes regarding your use of the information provided.
CBOT:ZSF2024
by GrainStats
January Soybeans Test Resistance The January soybean contract closed Monday’s session rallying for the fifth day in a row - closing at the exact 61.8% retracement of the August 28th high and October 12th low. Can the contract continue to build on its recent strength? Or will this week’s World Agricultural Supply and Demand Expectations (WASDE) report cut the rally short. The Bullish Case : Uncertainty surrounding the Brazilian soybean crop has been a major catalyst for the recent strength observed in the January soybean contract. The hot, dry weather affecting the major soybean growing areas has certainly taken a toll on yields, but it may be too early to tell if the damage done has been materially significant. Thursday’s USDA report could provide a glimpse into the situation - specifically, if we see a downward adjustment to estimated South American production estimates, the rally in soybean prices can certainly continue. The Bearish Case : After the open, January soybeans topped out at 1369 ¾ - a single tick away from the upper boundary of our 3-star resistance pocket between 1360 and 1370. Failure to close above 1370 serves as a warning signal in the short-term that the rally may be waning. Moreover, after making a 1-year high in January Soybean Meal contract, prices quickly turned lower. If we see soybean meal prices correct sharply, it will likely be a boon to January soybean prices. Lastly, the USDA is slow to make adjustments - even though the weather has not been favorable in Brazil, USDA may leave South American production estimates (particularly Brazilian production estimates) unchanged. Leaving production estimates unchanged would come as a disappointment to the trade, and also push prices lower. What To Watch For : Thursday’s WASDE report is likely the largest catalyst for price action this week. In that report, demand estimates and South American production estimates are likely going to be the two largest factors. But, there are a few other things that should be monitored closely. Specifically, domestic export performance through the end of the year, and price action across the other components of the soy complex - meal and oil - will have an effect on prices in the coming weeks and months. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSF2024
by Blue_Line_Futures
🌱 Soybean Technical Analysis (GrainStats)Soybean Fundamentals ( CBOT:ZSF2024 ) Soybean Harvest Progress 🚜➡️🌱 ▓▓▓▓▓▓▓▓▓▓▓▓░░░ 85% Export Inspections 🚢➡️🌎 1,890,227 Metric Tons ⬇️ 735,466 Metric Tons week vs. last week ⬇️ 1,030,191 Metric Tons this week vs. this week last year ⬇️ 372,103 Metric Tons this week vs. 5-year average Export Sales 22,259,064 Metric Tons (Cumulative, Current Marketing Year) ⬇️ 8,264,993 Metric Tons this week vs. this week last year Noteworthy News / Themes 🟢 Crush margins have re-bounded significantly due to the rally in Soybean Meal 🔴 It is still notably dry in Argentina and planting should be starting in full swing 🟢 US River levels have improved on the Mississippi river (barge freight down) Soybean Technicals Overall quite the sideways market with conflicting trends - one up and one down, with an inflection point coming up soon. Regardless, from a technical point of view, there is no trade in the middle of the range until any of the following levels get breached.👇 🟢 Upside Target: 13.31 🔴 Downside Targets: 12.97, 12.70
CBOT:ZSF2024
by GrainStats
10 year Bean Projection (potentially)10yr Corn outlook: Potential course of the Bean market for the next 10 years. Previous inflationary markets have caused for the multi year market structure to step up in price ranges. Before that range is found, Beans will need to mark a pivot high enough to ration some future demand. The low found after a major high is made, could mark an area for the future multi year market structure. The market should remain very sensitive for another few years. Sensitive to world demand and production misses across the globe. There are many climate cycles coming ahead that could add to potential Ag production shortages. **Not a prediction, something to watch**
CBOT:ZS1!
by mtb1980
November Soybeans Test 1300 The November soybean contract tested 1300 per bushel on Tuesday, trading all the way up to 1303 ½, before ultimately settling at 1296 ¾. The question is now - where do we go from here? Psychologically Significant Resistance Failing to close above 1300 means we failed to close above a psychologically significant resistance level at 1300. Moreover, we’ve previously identified 3-star resistance between 1294 and 1299 ¾. Because we closed within that resistance pocket, it’s possible that we test 1300 and beyond once again in Wednesday’s trading session. But what if we don’t? If the market corrects lower on the failure to trade through resistance, where do we find support? Previous Resistance Becoming Support If we reject higher prices in tomorrow’s trade, previous resistance between 1280 and 1285 ¼ should serve as the first line of defense. Meaning, that if we see prices sell off throughout the session on Wednesday, we should expect prices to bounce back somewhere between 1280 and 1285 ¼. If we cut through 1280 rapidly, the next sufficient support pocket may factor in near the 38.2% retracement level between the May 31st and July 24th price extremes - coming in around 1249-1250. The Bottom Line We are in the midst of a pivot in the November soybean contract. Tomorrow’s price action should provide guidance on the intermediate-term’s price trajectory. Last week’s USDA report was mostly supportive of the soybean complex, and export sales have performed well over the past 6 weeks. That said, net-exports remain lower than they were at this time last year, and global demand remains deflated. Pay close attention to tomorrow’s closing prices as they may indicate the direction of the trend over the next 2-4 weeks. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSX2023
by Blue_Line_Futures
Near-term Bottom for Soybeans?The soybean market has been under significant selling pressure since the August highs, breaking through some strong support pockets. Looking back to January of 2022, the market started to breakout to the upside, and we are now trading right near that breakout level after holding support very well, and the market is trying to push higher to finish out this week. There is significant support below this market as mentioned, and it has held well and bounced nicely to the upside, coming in at 12.57-12.52. When looking at key support or resistance levels, it is important to note that each time a significant level is tested, that level becomes weaker and more likely to break. If this support can hold and the market can rebound, we could see a test back at 12.89, and bulls will want to chew through that level to invite more buyers. Seasonally speaking, prices are still elevated compared to past averages. With that said, Soybeans typically can see a bottom around this time of year and look to run to the upside for an end of the year rally. For this market to make a significant move higher, bulls need to see this support pocket identified above to hold and need to see prices chew through some strong resistance with conviction as we push through harvest season. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSX2023
by Ryan_Gorman
What Drives Soybean Prices: El Niño, Geopolitics, or SeasonalityEl Niño means little boy in Spanish. The fishermen in Latin America observed periods of unusually warm water in the Pacific Ocean in the 1600s around Christmas. El Niño can cause 50% variation in local weather in regions growing essential crops like beans, corn, and coffee. Soybean is a giant in global trade. It ranks among the top comprising more than 10% of the total value traded annually. Soybean is used for edible oils, biofuels, and livestock feed. This paper introduces the impact of El Niño on bean prices, geopolitical risk in beans given its idiosyncratic market structure, and seasonality. Medium to longer term impact on bean prices will be dictated by severity of weather, demand, and energy prices. However, in the near term, record Brazilian output and ongoing harvests in China, India, Russia, Ukraine, and Canada will weigh down on bean prices. To gain from weakening prices, this paper posits a hypothetical short position in CME Soybean Futures expiring in November 2023 (ZSX2023) with an entry at USc 1296/bushel combined with a target at USc 1188/bushel and hedged by a stop at USc 1368/bushel, delivering an expected reward-to-risk ratio of 1.5x. EL NIÑO IS A RECURRING CLIMATE PHENEMENON El Niño and Southern Oscillation (ENSO) is a recurring climate phenomenon which has significant global impact on precipitation and temperature. ENSO is the result of the natural cyclical interaction between equatorial sea surface temperature (SST) and the atmosphere. These interactions lead to climate fluctuations across more than 60% of the world. ENSO has a major effect on rainfall and temperature variation. In some regions, such as those closest to the tropical pacific, ENSO can result in 50% of the total variation in local weather. These regions are often the most essential for important crops like bean, corn, and coffee. These interactions oscillate between warming and cooling periods leading to the ENSO cycle plotted below. The pattern recurs every two to seven years. Notably, the frequency of the ENSO cycle and the intensity of its effects have increased over the last fifty years due to global warming. As a result, ENSO has an outsized influence on global economy given its potency of delivering shocks to agriculture. El Niño are periods of warm ocean temperatures (highlighted in red) in the Central and Eastern Equatorial Pacific regions. La Niña are periods with cooler ocean temperatures (marked in green above) in Central and Eastern Pacific zones. Periods with no major deviation from average Sea Surface Temperature (SST) are considered normal weather conditions. Each El Niño or La Niña phase persists for two years on average. However, a longer-than-expected phase of El Niño (like the one in 2015) can lead to a much more significant impact on agricultural markets owing to larger drawdown on inventories. THE BEAN IS EXPOSED TO GEOPOLITICS The Americas comprise >80% of total global production. Top producers are Brazil, the US, Paraguay, and Argentina. These nations are also the top bean exporters. China is world's largest importer. It mops up 60% of global import demand. Beans in China is primarily used to feed its massive livestock population. Unlike staple grains, the bean industry is highly centralized given the structure of the sea-borne market. Consequently, they are prone to shocks from disruptions such as trade restrictions and geo-politics. In 2017, soybean was caught in the crossfire in US-China tariff war. Back then, China placed a 25% tariff on beans imported from the US. This drove demand for Brazilian soybeans as the US ones were rendered expensive for Chinese importers. The trade friction adversely impacted the US, to an extent that is feltto this day. Since then, US exports have been far lower while Brazilian exports have gradually expanded. It has also led to structural shifts in bean usage. SEASONALITY IS PREDICTABLE IN BEAN PRICE BEHAVIOUR As previously published , seasonality in beans is driven by the harvest cycle. North American crop is harvested between September and November while South America harvests from March to June. Bean prices decline after harvesting cycles. Distinct price patterns can be discerned by analysing seasonality. Prices rise through the first half of the year from January to June as inventories deplete. Then, they rapidly decline following harvesting in Argentina and Brazil. EL NIÑO FAVORABLY IMPACTS BEANS El Niño’s effect on beans is consistent. Usually, extreme weather typically creates havoc to crop and crop yield. But not so in the case of soybeans. Interestingly, research shows that El Niño favourably impacts American soybeans farmers leading to a 3.5% increase in yield on average. Increased rainfall and lower temperature in the Americas caused by El Niño explains this favourable weather impact on the crop. As Weston Anderson, et al. highlight , the impact is most significant during peak El Niño which is expected next year. While American farmers benefit from benign weather, Asian growers suffer adverse effects of El Niño, resulting in declining yield and production in Asia. OUTLOOK FOR BEANS Taking into consideration the drivers outline as above, larger harvest is expected in Brazil in 2024. In 2023, Argentinian harvest was significantly smaller due to unfavourable weather, and this is expected to recover back to its usual levels. The USDA is forecasting a larger harvest in China in 2024. However, peak El Niño could negatively impact Chinese crop leading to spike in import demand. Seasonal trends point to a winter rally in bean prices ahead. However, historical analysis shows that El Niño years result in a higher-than-average yield in soybean. Combining the effect of (a) record Brazilian output, plus (b) El Niño fuelled greater yields leading to abundant harvest in 2024, the higher-than-average yield in soybean could cause a potential glut. Bean oversupply will cut short a winter price rally. Worse still, a glut could make the post-harvest price crash next year much more severe. SIGNALS FOR BEAN PRICES FROM DERIVATIVES MARKETS The commitment of trader’s report points to declining net long positions by managed money inching towards lows observed during May earlier this year. Even the options market hints at bearish slant with put-call ratio at 1.13x within rising open interest build up in puts in the near term. Since mid-September, data from CFTC shows that bean options traders are positioning themselves against fall in prices as they have added 18,079 lots in puts versus 13,090 lots in calls. HYPOTHETICAL TRADE SET UP With more harvests coming onstream, soybean prices will come under increasing downward pressure in the near term. To gain from crumbling bean prices, a hypothetical short position in CME Soybean Futures expiring in November ( ZSX2023 ) with an entry at USc 1296/bushel and a target at USc 1188/bushel, hedged by a stop at USc 1368/bushel is expected to deliver a reward-to-risk ratio of 1.5x. Each soybean futures contract provides exposure to 5,000 bushels (~136 metric tons) and is quoted in US cents per bushel. Each tick represents one-fourth of a cent (USc 0.25) per bushel resulting in USD12.50 in P&L. • Entry: 1296 • Target: 1188 • Stop: 1368 • Profit-at-Target (hypothetical): USD 5,400 (1296 – 1188 = 108; 432 ticks x 12.50 = 5,400) • Loss-at-Stop (hypothetical): USD 3,600 (1296 – 1368 = -72; -288 ticks x 12.50 = -3,600) • Reward-to-Risk (hypothetical): 1.5x REFERENCES Nature ScienceDirect MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT:ZS1!Short
by mintdotfinance
2
MORE PRESSURE TO COME?Soybeans News • U.S. National Oilseed Processors Association (NOPA) data on Friday showed U.S. soybean crush fell to an 11-month low in August, below almost all trade estimates. Weak crushing demand comes as U.S. exports struggle to compete with record Brazilian shipments. • Last week’s USDA report showed a national average soybean yield of 50.1 bushels per acre, below the 50.9 in last month’s report but within the range of estimates. The month over month decline in yield dropped overall production to 4.146 billion bushels. Commitment of Traders Friday’s weekly commitment of Traders report showed Funds were net sellers of 8,995 futures/options contracts through September 12th. This was the second straight week of a shrinking net long position, which now stands at 73,815 contracts. Will long liquidation continue to be a trend as harvest picks up and supply grows? TBD. Volatility CME Group’s soybean CVOL index declined to its lowest levels since the spring, indicating a lack of uncertainty in the markets. The decline in volatility may make options more appealing for traders and/or hedgers to either manage risk or take a position in the markets. Technicals (November) Soybean futures broke below trendline support following the September USDA report. That technical failure has led to additional weakness since, with prices breaking below the 200-day moving average for the first time in a month. Previous support will now act as resistance, we see that as 1330-1332 1/2. The next downside objective for the Bears would be 1300-1304. Seasonality typically favors the Bear camp this time of year, when looking at the 5, 10, 15, 20, and 30 year averages. Bias: Bearish/Neutral Resistance: 1350-1355***, 1373-1381*** Pivot: 1330-1332 ½ Support: 1300-1304**** Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSX2023Short
by OliverSloup_BlueLine
The Grains; $8 Beans & $2 Corn is all but a foregone conclusionIf inflation exists at all but in the playbook of vested interests, to maintain sky-high prices in the grains will require much more than just the reliance on the traditionally levity-laden relationship of the mainstream media with the facts. The fact remains that the world has been in a food production overdrive for many moons by now. Even a makeshift operatic war, like the Ukraine conflict, could not alter this fact. Au contraire! The region's, collectively denoted as: "The Ukraine" (and only referred to as a "country" by the historically lesser versed), 6 Million square kilometer, top-flight, black soil now under US corporate ownership, that additional 13% of global grain production will - as it already does! - enjoy far more aggressive global "marketing" (i.e., push), backed by US know-how and vested interests. After all, that is what this whole charade was all about, from the beginning. (US gets the growing areas, the Russian Federation keeps the already occupied, eastern industrial belt - with peace proposals long prepared and on the table, by both parties. The only problem remaining now is how to declare "a winner"? - And that, being by far the most complicated part of that whole undertaking, could take a few more years - including, what to do with that pesky, remaining ~20 million, out of 50 million, inhabitants?) Corn's outlook goes hand-in-hand with that of Soy Beans; Wheat, as it is standard, has been well ahead in doing the collapso;
CBOT:ZS1!Short
by Nemo_Confidat
2
Where will soybeans find support?The November soybean market has been on a nice uptrend since the lows from August 8th, and we are seeing some selling coming after we topped out near 1409-5. Looking on the fundamental side, there is concerns for the continued hot and dry weather headed into next week which would support higher process, and the Mississippi water levels continue to decline, having a strong impact on basis. Seasonally speaking, this is the time of the year where the market attempts to create a new low in the near term, but we are currently trading significantly higher than what we typically see for this time of year. On the technical side, even though we have seen some selling throughout this week, we are still holding out above some strong levels, where old resistance is acting as support. If the beans continue to sell off on the November contract, there is support near 1367-7 where bulls would need to defend to continue the prices moving higher in the uptrend. There is also strong trendline support from the May lows, and a break and a close below that level would flip the bias from an uptrend to more neutral or bearish. The average true range (ATR) on this contract is near 25 cents, and so if the market continues lower, we will could see these levels tested in the next few trading days. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSX2023
by Ryan_Gorman
Soy bean will decreaseThere are a few factors that have contributed to the recent decrease in soybean prices. A record crop is expected in the United States. The US Department of Agriculture (USDA) is forecasting a soybean production of 122.7 million tonnes in 2023, which would be a record high. This is due to favorable weather conditions and an increased area under cultivation. Good crop conditions in South America. Soybean production is also expected to be strong in South America, with Brazil and Argentina forecast to produce record crops. This is due to El Niño, which is bringing more rainfall to the region. Weakening demand. Soybean demand is also weakening, as China has been importing less soybeans due to its own record crop. Entry: 1398'4 - 1399'6 SL: 1406.50 TP1: 1393'6 TP2: 1387'2 TP3: 1376.75
CBOT:ZS1!Short
by neurotrader95
3
Are Soybeans Headed for New Highs?Soybeans gapped higher Sunday night following Friday afternoon's release of the Pro Farmer Crop Tour findings. Wait...what the heck is the Pro Farmer Crop Tour? It's pretty much what it sounds like, but probably on a bigger scale than what you're thinking. Over the course of 4 days crop scouts (including myself) pulled a Pro Farmer record 1,800 samples of corn and 1,800 samples of soybeans across 7 states which make up for nearly 70% of corn and soybean acres. Each year, the Tour is divided into two sides, the East and the West. Within each of those sides are about 20 different routes that are split amongst groups of 2-4 scouts per car. The Scouts come from a wide variety of backgrounds including farmers, brokers, reporters, and hedge funds. Each team of scouts is tasked with collecting samples from random corn and soybean fields every 12-15 miles along their given route. So what did the find? With all the data from last week in, Pro Farmer estimates the national average soybean yield at 49.7 bushels per acre with the margin of error being +/- 2%, which puts the yield range from 48.7-50.7bpa (below the current USDA estimate). With the soybean crop still developing, weather will continue to be a big focus. Weather outlooks throughout the Midwest into the middle of September suggest above normal temperatures coupled with below normal precipitation levels which could hinder yield potential. With uncertainty still looming, new crop weekly options could be a great tool for producers, end-users, and traders to consider using to help manage risk or to express an opinion in the market. How does the chart look? Through the month of August the chart has been firming up, posting a string of higher highs and higher lows over the last two weeks. If the Bulls can keep this momentum going we could see a retest of the July highs which come in from 1428-1435. If the Bulls fail to defend the Sunday night gap higher and we close back below that pocket (1390 1/2-1392), we could see that trigger some long liquidation. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZSX2023Long
by OliverSloup_BlueLine
1