Soy futures bounced to end the week with funds moderate buyers as January soybeans held the first line of support at $9.85. However, the rally was met with Brazilian soy hedging as the real declined 1% to settle at 3.28:1 USD. Funds were buyers of; 3,200 contracts of soybeans and 2,600 contracts of soymeal, while selling 2,500 contracts of soyoil. Unwinding of Long Oil/Short meal spreads was noted.
China’s soy import pace continues to disappoint from the US with weekly export inspections already reaching an early annual high. ARC argues that US 2017/18 soybean exports could easily be 50-100 Mil Bu less than WASDE based on Brazil’s late season export pace and now new concern over China’s slowing on Saftey Certificate Approval. China is worried that GMO soybeans are being intermixed with the local non GMO beans and making into their food supply. This is keeping Chinese importers as securing US soybeans on a hand to mouth basis as safety certificates are slowly issued.
The monthly soybean chart to the left reflects a triangular shape that has been forming since early 2015. A break above or below support will key the next move. This move will likely correlate with South American weather into February.
