Soybeans Falls into the Weekend as Export Data Suggests Limited China Buying

Soybean futures experienced weakness on Friday, with nearby contracts declining 17-22 ¼ cents, despite January contracts securing a weekly gain. This downturn was influenced by the USDA's updated Crop Production report, which lowered the US soybean yield to 53 bpa and reduced total production by 48 mbu to 4.253 bbu. Consequently, US ending stocks were cut by 10 mbu to 290 mbu, and global ending stocks by 2 MMT to 121.99 MMT, even as a backlog of 1.348 MMT in unreported large daily sales, including significant volumes to unknown destinations and China, was revealed. Market participants are now awaiting Monday's NOPA data, with October crush projected around 209.52 mbu.

Analysis

Soybean futures exhibited weakness on Friday, with nearby contracts declining 17 to 22 ¼ cents, although January contracts secured a 7 ½ cent gain for the week. This market movement was influenced by the USDA's updated Crop Production report, which lowered the US soybean yield by 0.5 bpa to 53 bpa, resulting in a 48 mbu reduction in total production to 4.253 bbu. The cmdtyView national average Cash Bean price also fell by 22 3/4 cents to $10.50 1/4.

The revised USDA data led to a 10 mbu decrease in US ending stocks, now projected at 290 mbu, and a 2 MMT reduction in global ending stocks to 121.99 MMT, primarily due to lower production and reduced export forecasts of 50 mbu. However, a significant backlog of 1.348 MMT in previously unreported large daily sales, including 332,000 MT to China and 616,000 MT to unknown destinations, indicates persistent underlying demand. Brazil and Argentina also reported increased exports, contributing to the global supply-demand rebalancing.

Investors are now focused on the upcoming NOPA data, scheduled for release on Monday morning, which is expected to provide further clarity on domestic crush demand. October crush is projected to total 209.52 mbu, with a wide range of 197.4 to 223.5 mbu, while soybean oil stocks are anticipated to rise to 1.257 billion lbs from 1.243 billion lbs in September. These figures will be crucial in assessing the near-term demand outlook for soybeans.

Key Decisions for Investors

• Monitor the upcoming NOPA crush data closely for confirmation of domestic demand strength, as the projected 209.52 mbu for October crush could significantly impact price direction.
• Evaluate the implications of reduced US and global ending stocks, which, despite Friday's price weakness, suggest a tighter supply outlook that could support prices in the medium term.
• Consider the underlying demand indicated by the 1.348 MMT of previously unreported sales, particularly the substantial volume to unknown destinations, as a potential bullish factor for future export activity.