Soybeans price forecast: More downside after the WASDE report

September 12, 2023 05:02 PM PDT | By Invezz

Soybeans price forecast: More downside after the WASDE report

Soybeans demand and supply

The biggest catalyst for soybeans prices was the latest World Agriculture Supply and Demand Estimates (WASDE) report. The report predicted that the US soybeans production will be 4.1 billion bushels, down by about 59 million bushels.

The decline of soybeans production is mostly because of lower yields since the planted area rose this year. Yield dropped to 50.1 bushels per acre. As a result the US will export less soybeans this year. Other countries having less supply are Thailand, Argentina, and the European Union.

Brazil, the second-biggest soybeans producer will see higher production this year. The same is true for Ukraine, which has increased its acreage and yields even as the Russian invasion continues. At the same time, China is expected to continue boosting its soybeans imports, especially from Brazil. The report said:

“China’s imports for 2022/23 and 2023/24 are increased on higher crush demand and large shipments from Brazil that are expected to continue into the next marketing year. Global soybean ending stocks are reduced 0.2 million tons to 119.2 million.”

The biggest risk for soybeans and other agricultural commodities is the weather. Production in most European countries has dropped because of the recent heat wave in the region. Another risk is that Argentina, a major producer, is going through a major economic crisis that is affecting production.

This decline is being offset by the rising production in China, the biggest soybeans consumer. The country, whose soybeans demand stands at 115 million tons, is now boosting internal production. Beijing hopes to increase annual production from 20 million tons to 36 million tons by 2032.

China is boosting its soybeans production in its goal to reduce dependence on the United States.

Soybeans price forecast

Soybeans chart by TradingView

The daily chart shows that the soybeans price has been in a strong bearish trend in the past few months. This decline happened after it formed a rising wedge pattern that is shown in green.

In price action analysis, a rising wedge is usually a sign of a bearish breakout. Soybeans made this bearish breakout in April and then retested it in July. It now remains below the 50-day and 200-day moving averages. The two averages recently made a bearish crossover pattern.

Therefore, soybeans price will likely continue falling as sellers target the next key support level at $1,283.4, the lowest level on May 31st. This price is ~7.65% below the current level.

The post Soybeans price forecast: More downside after the WASDE report appeared first on Invezz

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