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Soybean Prices Rose above the Key Support

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Trend in soybean prices

March soybean futures contracts were trading near the crucial support of $8.85 per bushel on January 27, 2016. Prices continued on the upward price channel on the day. The volume rose by 25.4% and the open interest fell by 0.21% on January 27. Prices traded above the 20-day, 50-day, and 100-day moving averages on January 27, 2016, after four consecutive days. Prices also breached the crucial support level of $8.80 per bushel on January 27. They were expected to continue on the upward price channel.

The above chart suggests that prices could be $8.75–$8.90 per bushel in the near term.

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Price drivers

The US Congressional Budget Office’s estimate for marketing year 2016-2017 was lower than analysts soybean planting and output projection. It supported soybean prices on January 27. Dry weather conditions in Argentina could hurt the soybean production. This helped US soybeans on the day. The US dollar depreciated by 0.04% on January 27, 2016. It supported export projections.

Rabobank’s weaker projections for soybean futures prices negatively impacted soybean prices on January 27, 2016.

Stocks review

Fertilizer companies receive support from the rise in the farm income. The increase in soybeans supports farm incomes. They’re positively related to the shares of fertilizer businesses. Chemical & Mining Co. of Chile (SQM) rose by 0.26% on January 27, 2016, after falling for two consecutive days. CF Industries Holdings (CF) rose by 1.9% for the second consecutive trading day on January 27, 2016. Prices rose by 5.1% during the period. Martin Midstream Partners (MMLP) fell by 0.12% on January 27, 2016. It lost the slight gains from the previous day. CVR Partners (UAN) fell by 2.6% on January 27, 2016. It continued the downward movement. The Material Select Sector SPDR Fund (XLB) fell by 0.79% on January 27, 2016. It followed the downward price channel.

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