Can Chicago soybeans
make it back over $15.00 a bushel for the first time in a month?
That is one of the key technical levels that investors are
looking out for, to indicate if the oilseed's 9% rebound from a multi-month low
reached in mid-November has legs.
"A close over $15.00 a bushel for the January or March
contracts would look bullish on the charts," Mike Mawdsley at Market 1 said.
Brian Henry at Benson Quinn Commodities said: "There may be
some buy stops in soybeans, if the Jan trades above $15.00 a bushel," if adding
that "a better round of buy stops is just above the $15.10 price level".
And at RJ O'Brien, Richard Feltes noted that the oilseed "tends
to rally" ahead of US Department of Agriculture Wasde crop reports, the
department's flagship monthly briefings, a historical trend "which suggests a potential
rebound to the Fibonacci retracement level of the $15.30-a-bushel area in a bid
to slow demand".
However, ahead of such heights lies a battle with the 50-day
moving average, which January soybeans have not closed over since September,
and which the lot was grappling with in early deals on Friday.
The contract retook the average, at a little over $14.96 a
bushel, at one stage before retreating to $14.94 ¼ a bushel as of 08:55 UK time
(02:55 Chicago time), a gain of 0.3%.
Behind all the technical talk, the oilseed has gained a head
of steam from fundamental factors, with US weekly export sales of the oilseed
topping 1.1m tonnes in the latest week, data on Thursday showed, well ahead of
market expectations, besides the rate needed to meet USDA full-year forecasts.
Indeed, they were five times what is needed to meet the USDA
"China was said to have acquired up to six cargoes from the
US this week and is set to seek more in the coming weeks," Lynette Tan at
Phillip Futures, in Singapore, said.
Meanwhile, US demand is said to remain firm, buoyed by
revivals in values of soymeal and soyoil, the products made from
Soymeal, whose export data were also strong, gained a
further 0.2% to $451.50 a short ton for January delivery, with January soyoil
flat at 51.20 cents a pound.
(This time, palm oil
managed to close its discount, adding 1.0% to 2,318 ringgit a tonne in Kuala
Lumpur, as investors covered short positions ahead of data next week, which are
expected to show Malaysian inventories at a record high, and so have been
depressing the market.)
Soy complex prices are also being helped by the poor
conditions besetting farmers in Argentina, the top soyoil and soymeal exporter,
as they try to get soybeans sowed, and contrasting with improving hopes for
Latest data showed Argentine growers running behind by an
area the size of Belgium, with rains holding up sowings.
"It is interesting to note that our lead Argentine crop contact
is pegging the corn crop in the 24m-tonne
area, down 4m tonnes from the USDA, and soybeans at 51m tonnes, down 4m tonnes
from the USDA as well," Richard Feltes said.
Michael Cordonnier, the noted crop scout, has pegged the
Argentine harvest at 22.5m tonnes, warning that flooding means "some fields are
not going to be planted".
'Exports have to be
Not that Argentina's hiccups are helping corn much, with the grain continuing to
suffer from poor weekly US export sales, which came in at some 50,000 tonnes, a
fraction of expectations.
"US exports have to be watched closely as it is likely to be
the key indicator for market movements from now till late January next year,
when a clearer picture of output for corn and soybean in Brazil and Argentina
becomes available," Lynette Tan said.
Another factor regaining attention in the corn pit is the price
of crude, which corn is linked to as
a raw material for bioethanol plants, and whose decline in the last session was
seen as one of the reasons for the grain's lower finish.
But while Brent crude rebounded 0.3% to $107.28 a barrel, corn
remained overshadowed by the export data, and eased 0.2% to $7.49 ½ a bushel, a
level which seems to have acted as something of a magnet of late.
'Prices still high
Wheat has found a
level too, at the bottom of a price corridor it has trod since the early
"Wheat, despite record low US winter wheat ratings and the shortfall
in 2012 former Soviet Union wheat production/exportable surplus, is hugging the lower end of a six-month
descending channel," Mr Feltes said.
Investors know "full well that current prices are still high
historically, and thus capable of sparking a rebound in 2013 northern hemisphere
And are they high enough too to be choking off demand? Certainly
US export sales, while not dismal, have not been as buoyant as many had hoped (although
the European Union has enjoyed its best week in two years for wheat shipments).
"Our prices are getting down to levels that are competitive
or even cheaper than other countries," Market 1's Mike Mawdsley said.
"But we need to see that demand show up every week at this
March wheat did its best to make itself more appealing by
easing 0.4% to $8.58 ½ a bushel.
Among soft commodities, New York raw sugar maintained its
downswing of the previous session, falling 0.3% to 19.30 cents a pound for
March, pressed by ideas of the world production surplus in 2012-13.
Vietnam did little to help bulls by tripling its import duty
on the sweetener to 40%, citing strong domestic production, expected to reach
1.5m-1.6m tonnes, and outpace annual demand of some 1.3m-1.4m tonnes.
New York cotton for
March eased 0.3% to 73.34 cents a pound despite Indian arrivals of the fibre
falling 18.5% so far in 2012-13, Cotton Corporation of India data showed.