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Soybean Prices Were below the 20-Day Moving Average

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Trend in soybean prices

Soybean futures prices for March delivery were trading near the crucial support of $8.75 per bushel on February 4, 2016. Prices fell for the second consecutive trading day. The prices’ prospects are rangebound before the WASDE report. It will release next week. The volumes rose by 21.7%. The open interest fell by 5.4% on February 4, 2016. With the fall, soybean prices traded near the 20-day, 50-day, and 100-day moving averages.

The above chart suggests that prices could be $8.70–$8.90 per bushel in the short term.

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Price drivers

The Weekly Export Sales Report was low. It pushed prices down on February 4, 2016. The supportive output consensus, with the favorable weather forecast for Argentina, dragged US soybean prices on the day.

A reduction in the soybean output prospects by CONAB—Brazil’s National Food Agency—supported prices with lower export competition cues. The US dollar depreciated by 0.81% on February 4, 2016. It supported the export sentiments for soybeans.

Stocks review

Falling soybean prices hurt farm incomes. It had a negative impact on fertilizer sales. However, a decrease in soybean prices on February 4, 2016, supported fertilizer businesses including Enterprise Products Partners (EPD), CVR Partners (UAN), and CF Industries Holdings (CF). They rose by 2.6%, 13.9%, and 1.8%. These shares rose for the second consecutive trading day. During the period, they rose by 3.7%, 18.2%, and 3.9%. Agrium (AGU) rose by 1.5% on February 4, 2016. It recovered partially from the previous day’s fall of 2.6%. The Material Select Sector SPDR Fund (XLB) rose for the second consecutive day by 2.8%. It supported prices by 6.2% during the period.

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