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Bearish pressure on beans is rising. In fact, it is a surprise to analysts at OCBC bank that soybeans have not cracked under that pressure. With the Brazilian harvest almost done, ICE prices may see sell-off.

Bearish pressure persistent

“We estimate that the Brazil harvest is about 85% done as of last week. While that is still way behind the average, in pure tonnage terms the amount of Brazilian beans harvested is already at a record high, which should continue to add pressure on American bean exports. That brings us to our last point – US soybean exports was again paltry last week at 12.7mil bu.”  

“More worrying was the net cancellations of fresh orders from China of 7.9mil bu, presumably on the back of export pressure from Brazil. Against such a bearish environment, it is perhaps surprising that ICE soybeans have yet to materially correct downwards.”  

“$14 appears to be the crucial support for ICE soybeans – if that is broken, we may see a quick unwinding of long positions.”

 

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