Soybean price enters overbought territory ahead of WASDE report

By: Faith Maina
Faith Maina
Faith strives to break down complex developments so investors can make better informed decisions. When Faith is not immersed… read more.
on May 12, 2021
  • Soybean price is at a 9-year high at $1646.25 amid heightened Chinese demand and supply concerns.
  • Price is in the overbought territory at an RSI of 80.
  • Investors are keen on May’s WASDE report scheduled for Wednesday’s afternoon.

Soybean price is at a 9-year high ahead of May’s WASDE report. The soaring prices have placed it in the overbought territory at an RSI of 80. The report comes at a time when surging commodity prices have revived inflation concerns. US corn is currently up by 0.22% at $723.60. While London wheat has risen by 0.54%, US wheat has dropped by 0.09% at $741.30. Investors are keen on USDA’s estimates amid heightened Chinese demand and supply concerns.

soybean price

Upcoming WASDE report

The US Department of Agriculture is scheduled to release the May WASDE report later in the day. In April’s report, USDA left the ending stocks unchanged at 120 million bushels. It adjusted its estimates of soybean price in the current season, up by 10 cents to $11.25 per bushel.

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At the same time, it raised its forecast of global soybean production by 1.4 million tonnes to 363.2 million tonnes. The adjustment was largely due to the favorable weather conditions in Brazil’s soybean-growing areas. For those looking to invest in commodities, the focus in today’s report will be the global ending stocks and global production. These details are founded on the heightened Chinese demand and unfavourable weather conditions in Brazil.  

Other agricultural commodities are also surging ahead of today’s report. Corn price is up by 0.22% at $723.60 rice price has risen by 0.78% at $14.18. In relation the agricultural commodities’ current price movements, Commerzbank noted, “The market is particularly nervous ahead of the first global USDA forecasts for 2021/22.”

Soybean Price Technical Outlook

Soybean price is at its highest level since September 2012. At the time of writing, soybean futures were up by 1.95% at $1646.25. This is a pullback from $1654 earlier on Wednesday. On a 3-hour chart, it is trading above the 25 and 50-day exponential moving averages. Besides, with an RSI of 80, the price is in the overbought territory.

I expect soybean price to ease further to $1600, where it will find support. Despite the forecasted easing, the bullish outlook remains. After the pullback, the bulls are likely to have gathered enough momentum to push the price to 1792, which will be its highest level since 6th September 2012.

soybean price
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