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USDA report on Oilseeds is hurting Soybeans

In a scheduled report released by the US Department of Agriculture last night, estimates for Soybean production and supplies were projected to rise against the market’s expectations and positioning for a lower number. This sent Soybean prices tumbling by as much as 6.5% in active trade as bets were unwound faster than the report could be read in its entirety! Soybean production for 2015/2016 is projected at 3.916 bushels, up 31 million. This is due to the increased yield of Soybean extracted per acre of 46.9 bushels per acre. A yield slightly below last year’s record level. As a result, stocks for Soybean are forecasted to increase by almost 10% to 470 million. September futures for Soybean were sold down but have continued to remain in a state of backwardation. As a result, long holders for the Soybean-cash continue to enjoy a 20% positive carry. Looking at the charts below, the price has broken below both support levels after last night’s report as traders scrambled to cut their longs going into last night’s release. At the current price of USD940, a rebound above the 944 level may offer a firmer ground after last night’s collapse with an eventual test of the 954 previous support/current resistance possible. Conversely, last night’s low of 930 and the key support at 920 continue to remain a key support for this commodity.



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