Yahoo Finance Soybean Prices Traded below the Crucial Moving Averages
Grain Prices Fell Due to Export Competition from South America
Trend in soybean prices
Soybean futures contracts for March 2016 expiry were trading near the support level of $8.65 per bushel on February 5, 2016. Prices fell below the crucial support of $8.70 per bushel with the fall in prices on the day. The volume fell by 9.7%. The open interest fell by 0.26% on February 5, 2016. Prices continued to trade below the 20-day, 50-day, and 100-day moving averages for the second consecutive trading day. Prices could remain below this level in the near term.
The above chart suggests that prices could be $8.60–$8.90 per bushel in the short term.
Price drivers
Higher output cues from favorable weather conditions supported soybean wheat prices on February 5, 2016. The US dollar appreciated by 0.45% on the day. It dragged the export sentiment down. The higher dollar isn’t favorable for export markets.
In contrast, the speculation of higher South American production and supply cues could negatively affect US soybean’s spring rally.
Stocks review
The fall in soybean prices has a negative impact on farm incomes. Falling farm receipts pull down fertilizer sales. This has a negative impact on fertilizer stocks’ profitability. Companies such as Chemical & Mining Co. of Chile (SQM) and Enterprise Products Partners (EPD) fell by 1.9% and 4.6% after rising by 6.5% and 3.7% for two consecutive days on February 5, 2016. Monsanto (MON) fell by 0.78% after rising for two days. It rose by 8.9% on the day. However, CVR Partners (UAN) rose by 0.99% for the third consecutive day. It rose by 19.3% during the period. The WisdomTree India Earnings ETF (EPI) fell for the second consecutive trading day by 0.22% on February 5, 2016.
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