Soybean prices are up a bit this morning after again finding technical support around their 200-Day Moving Average at $9.75 per bushel. The U.S. harvest has made big gains as of late and doesn't appear to be much of a major concern for the trade, despite some extremely cold temps across the northern areas.
The trade is also keeping an eye on Chinese demand. Keep in mind Chinese soybean prices have recently fallen to multi-month lows and are perhaps creating a slight nearby headwind. Weather risk out of South America seems to be the main driving force.
As you can see from the graphic below, as long as Brazilian soybean production estimates remain in the 105 to 110 MMT range and exports between 62 and 64 MMTs, it's probably going to be tough to put together an extended nearby rally.
On the flip side, if we can push Brazilian production sub-105 MMTs and exports sub-60 MMTs, then perhaps we have a story brewing... Remember it's extremely early, the Brazilian crop is thought to be somewhere between 20% to 25% planted, which planting in Argentina is just getting underway.
Also creating a slight nearby headwind is perhaps a weakness in the Brazilian real, which has been under some nearby pressure. Staying patient!
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