The soybean market maintained its gains to begin the week. Also, the market structure and price pattern could signal an early investment opportunity in this commodity from the discounted price.
Soybean Fundamental Releases
According to FGIS data, soybean shipments for the week ending November 21 reached 2.102 MMT (77.24 mbu), 33.5% more than the same week a year ago but 7.3% less than the previous week.
205,727 MT were going to Mexico, while the majority, 1.23 MMT in shipping, were going to China. As a result, the advertising year's total reached 19.388 MMT (723.4 mbu), the highest since 2020–21 and 12% higher than the previous period.
AgRural reports that 86% of Brazil's soybean crop had been planted, up from 74% at this time last year. Key regions of Brazil will experience drier-than-normal temperatures over the following week.
Soybean Export Outlook
With China and Mexico being the top two export destinations for American oilseeds as well as grains, President-elect Donald Trump has rendered it clear what his trade policy will be in 2025. Our evaluation of the possible effects on the markets for wheat, corn, and soybeans is shown below.
Since soybeans will account for 45% of the United States exported soybeans in 2024, they are the commodity most at risk from an economic war with China. It is generally anticipated that a dispute over trade with China would lead to China retaliating by moving its soybean transactions to Brazil and Argentina since South America is predicted to harvest its largest-ever soybean crop in 2025. In preparation for a trade conflict, China has also accumulated soybeans.
US Elections Effect on Soybean Prices
The rerouting of U.S. exports of soybeans into smaller markets would come at an increased cost. The farmer will bear a larger portion of the higher transportation costs in a supply surplus situation. In a trade conflict, Mexico, the United States' second-largest market for soybean exports, might retaliate by moving consumer demand to the continent of South America.
Nonetheless, U.S. soybean crushing machines and livestock operators who feed soybean meal mainly to chickens and hogs would profit from declining soybean prices on a broader basis. Tariffs on old cooking oil (UCO) imports, which are mostly from China, would also help soybean crushers from increasing soybean oil prices. UCO is in competition with soy oil as a renewable diesel feedstock.
Soybean Prices Technical Analysis
In the daily chart of Soybean, the recent price showed a decent V-shape bullish recovery from the 944.20 support level. Although no significant buying pressure has come after the reversal, the price remains under buyers zone.
The 50% Fibonacci Retracement level from the 1258.10 high to the 944.20 low is marked at the 1079.60 level, which is above the current price. As the recent price trades below this line, we may find a buying opportunity from a discounted price.
On the other hand, the Moving Average wave is still above the current Soybean price, working as a resistance like the High volume line.
Based on this outlook, a valid bullish recovery above the trendline resistance coil be a primary long signal, aiming for the 10500 level.
On the other hand, a failure to overcome the 50 day EMA line might resume the existing trend by finding a new low below the 944.20 support level.
