Soybean price is trading higher after its plunge at the beginning of the month. Supply concerns have triggered the gains ahead of April’s WASDE Report on Friday. The agricultural commodity is trading at 1,427 after falling slightly below 1.400 late last week.
April’s WASDE Report
For those looking to invest in commodities, the details of April’s WASDE Report will offer cues of soybean price movement in the ensuing sessions. In its March report, USDA left its forecasts for the produce use and supply largely unchanged. The agency left its estimates of ending stocks at 120 million bushels. The amount was a decline by 405 million bushels from 2020’s record number.
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Investors are now keen on the adjustments that the US Department of Agriculture will make in its Friday’s report. Notably, the report comes at a time when a significant portion of US farmers have chosen to plant corn over soybeans.
The practice of crop rotation and bullish outlook for ethanol demand have fuelled the shift. Last week, USDA reported that the spring planting season in the US would have 87.6 million and 91.1 million acres under soybeans and corn respectively. The estimates missed analysts’ predictions of 89.996 million acres for soybean and 93.2 million acres for corn. Subsequently, soybean price surged to a one-month high at 1,456.
In its Crop Progress Report, USDA has indicated that 2% of the US corn has already been planted. The number equates to its 5-year average. In comparison, the amount of the seeded soybeans is not enough to warrant a progress report.
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Soybean Price Technical Outlook
After plunging to 1,398 on 1st April, soybean price is on a rebound ahead of Friday’s WASDE Report. The commodity is trading at 1,427.2, up by 1.03%. On a 2-hour chart, it is trading above the 20 and 50-day exponential moving averages. The price is likely to experience some resistance at around 1,430 before the bulls push it higher. Above that resistance level, the next targets will be 1,440 and the one-month high of 1,456.
This thesis will be invalidated if soybean price drops and moves past the support level at 1,410 to the downside. If that happens, the level to watch out for will be 1,390 and 1,364.
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