Soybeans’ Recovery Capped, Sugar Down to 7-Month Lows

Soybeans prices are down on Friday due to trade war and profit taking; Sugar is negative big as experts are forecasting another year of surplus.
Mauricio Carrillo
Soybeans' Recovery Capped, Sugar Down to 7-Month Lows
Soybeans’ Recovery Capped, Sugar Down to 7-Month Lows

Soybeans prices are trading down on Friday as investors are digesting trade war events between China and the United States. Also, the sugar surplus is adding pressure to the commodity.

Corn accelerates and reaches near three months highs at 3.742 on Friday. Wheat is extending recovery as it is consolidating gains above 4.600. Sugar breaks below 0.1135 resistance and trades at 7-month lows.

Soybeans resume its decline

Prices for soybeans are down on Friday as the 20-day moving average has contained the oilseed recovery in the last three days and it is now trading around 8.178.

A cocktail of factors is contributing to the decline. First, the trade war between China and the United States are adding pressure on prices as investors are worried about China stopping soybean purchases from the United States.

As reported previously, the market doesn’t see any solution to the trade conflict any time soon.

Second, the 20-day moving average has been acting as a resistance which has contained the seed recovery. 8.355 on May 15, 8.326 on May 16, and 8.296 today Friday, May 17, always the 20-day moving average capping gains.

So, investors finally gave up on the recovery and let the seed go down.

And third, Friday rebalancing and profit taking is also affecting the unit as investors consider that it is better to have profits in the pocket before the weekend, especially after the two reasons mentioned above: Trade war and the price unable to break above the 20-day moving average.

Currently, Soybean prices are declining by 1.0% as it is trading at 8.192. On the week, however, the unit is posting its first positive week in the last six.

Technically, the commodity looks bearish, but the good news is that it will close the week above the 8.000 area.

Sugar breaks 0.1135 critical support

The price of sugar is trading considerably lower on Friday as global surplus is pressuring prices to the downside. Also, the trade war is taking investors attention.

Sucrose is trading 2.5% down on the day as it is extending losses for the third day. On Friday, Sugar broke below the 0.1135 critical support before pricing as low as 0.1120, its lowest level since October 4, 2018.

The outlook is for more losses as sugar prices will remain flat until de the end of the next year, according to MM Murugappan, chairman of the Indian based Murugappa Group.

“The sugar market will face a country and worldwide surplus until next year,” Murugappan said, “so the sugar-year after next should see some increase in demand.”

If sugar extends its decline, it will find support at 0.1100 and 0.1070. Below, check for the psychologic level of 0.1000 as a buying zone.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.