Fundamental Analysis: Soybeans were able to build on early gains that were once again driven by strong export data. A hefty sale of 498,000 tons were sold to China for new-crop delivery, this coming after sizable flash sales announced earlier in the week. China is stepping into the market in a big way after the recent price dip. It’s early to say with much confidence, but there’s no reason yet to doubt that China can meet the USDA’s estimate for a record 87 million metric tons of imports in 2016/17. We’ll watch to see if the government analyst make any adjustments to that projection on Friday. There are some who would suggest that the number will be difficult to reach given that China’s government is releasing beans from state reserves. Demand data have been good for soybeans, no doubt, but next week its back to a focus on the supply side with our first USDA yield estimate due out on Friday.
Tech Comment: Friday’s move put November soybeans above their 10-day moving average but left the contract short of the week’s high. A settlement above minor resistance at $9.68 paves the way for a test of $10.00, and the last interim high at $10.00. Prices remain in the window to put in a 32 week low at any time. A close over $10.06 would put the Nov. contract in position to work back to minor resistance that starts at $10.20, with stronger resistance at $10.48. A move over $9.68 would add a small sign the minor trend might be turning up, with a close over $9.82 positioning Nov. to test the $10.06 high. But until then, there’s a chance Nov. could slip toward $9.25. We continue to believe the $8.50 contract low is essentially out of reach.
Basis Trends: Gulf +72 – stdy, Eastern Corn Belt – dn 7/up 3, Western Corn Belt – stdy/up 5.
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