Soybeans up But Limited as China Demand Remains Robust
Agricultural futures are trading mixed on Monday as investors are digesting news around the world. Wet weather in the United States and a hot wave in Europe are in the headlines.
Besides, reports from China that the demand for soybean remains robust despite the swine fever outbreak is signaling that farmers are switching to manufactured feed for their herds from food waste as it was for centuries.
Soybean fights to maintain levels above 8.700
Prices of Soybean are extending its middle term decline from 9.150 although it opened the week with gains on Monday. Earlier in the day, the oilseed recovered ground from 8.685 to trade as high as 8.780; however, the unit was able to sustain gains, and it is back to 8.715, still 0.26% positive in the session.
Investors on soybeans are digesting news that demand in China remains robust despite continued swine fever outbreak, but also, that Chinese scientist developed a gene-edited soybean that can grow in warmer climates.
On the other hand, the forecast for dry weather is adding pressure to soybean prices as a warmer than expected climate pattern could put newly planted crops in risk.
Analysts at Allendale affirms that Agriculture “traders will be cautiously watching weather maps, the weekly crop progress report and the results of the USDA July WASDE (World Agricultural Supply and Demand Estimates) report as it will be released later this week.”
Back to prices, Technical conditions suggest more room for the downside but small hope for a turn is on the cards. The unit is now testing the 8.690 area; in the case it breaks that level, soybean prices will face next support at 8.600 and 8.500.
To the upside, the grain should first recover the 8.800 area before thinking on potential upside.
Corn positive for the fourth straight session
Corn is extending its rally for the fourth consecutive session despite reports from the United States Department of Agriculture that say the export sales of corn dropped week-to-week in the last seven days to June 27.
Sales of corn were 41% down to 175,600 metric tons from the previous week, but interestingly 42% up from the prior four-week average.
In this framework, corn is now trading 0.80% positive on Monday as prices are testing the 4.400 area. Corn has almost recovered all losses suffered on June 28 and July 1 amid profit-taking.
Prices are returning to the range between 4.400 and 4.500 performed from June 14 to June 28. If the unit breaks above the mentioned 4.400 level, it will face the next resistance at 4.500.
Grain prices report for July 8, 2019
Wheat is trading flat on Monday after performing two positive sessions that took the unit from July 3 lows at 4.955 to trade as high as 5.135 today.
Currently, Wheat is moving at 5.108, 0.04% negative. Investors are digesting the news of a new crop arrival in Russia that are pushing prices down and severe weather in Russia and the United States.
Sugar remains trading in the range between 0.1200 and 0.1240 it has been moving in July. On Monday, sugar prices are trading 1.3% positive t 0.1227.