2/22/2024

A round of fresh lows and some give-up selling on the farmer side were all we had to highlight Thursday's session. The USDA confirmed the sale of 126,000 tonnes of sorghum for delivery to China during the 2023/24 marketing year. Funds continue to go head-first in growing their net short positions, now at their second-largest all time and increasingly close to their largest ever. There is just nothing to light a fire underneath soybeans. We have been unable to recover to $12 and some simple price ratio math tells the market they may still be too expensive when compared to corn. Historically, February has rarely been a month where the bulls are in control. The funds will need to take profit at some point and subtle looks at trade wanting to go higher have become increasingly more common since the end of last week. Along with that, premiums on call options are not decreasing in value as quickly relative to the futures on a week-to-week basis. There was not much change in the ethanol report this week. Production increased by just 1,000 barrels/day to 1.084 mln bbls/day and stocks were off 300k barrels to 25.5 million.

March soybeans are now just above an important support level on both the current contract and continuous chart. The 1145’0 area was our rallying point this past spring and the floor of our bullish breakout back in late 2020. Closing the week below this support line would like ignite another round of shorting.