Soybeans Rally Signals Market Momentum Shift—Here's What Traders Need to Know

Soybeans delivered a solid performance on Friday, with most contracts climbing 4 to 5 cents. While March futures only slipped 4¾ cents for the week, the broader momentum suggested underlying strength. The cmdtyView national average Cash Bean price surged 5¼ cents to reach $9.87¼, signaling real demand at the physical level.

Soymeal and Soy Oil Paint Mixed Picture

Soymeal futures told a different story, jumping 80 cents to $2.40 higher on the day despite March’s weekly decline of $13.70. Soy Oil futures, however, retreated 18 to 36 points Friday, though the weekly gain of 292 points shouldn’t be ignored. Traders appeared to be reassessing positions across the complex, creating the kind of choppy action that often precedes significant moves.

Specs Cut Long Positions Dramatically

The weekly Commitment of Traders report revealed a major shift: speculative traders aggressively reduced their net long position in soybean futures and options by another 44,756 contracts, bringing it down to just 12,961 contracts as of January 13. This rapid unwinding raises questions about conviction levels among large traders heading into the new week.

Export Reality Check: Soybeans Facing Headwinds

Here’s where things get concerning for the bulls. Export Sales data shows total soybean commitments standing at 30.637 MMT as of January 8—a troubling 25% below the same period last year. That represents just 71% of the USDA’s projection and falls 15 percentage points short of normal pace. Actual accumulated shipments are even worse: 17.984 MMT represents only 42% of the USDA estimate and trails the typical 60% average by a wide margin.

Brazilian Supply Shift Adds Complexity

Private crop analysts updated their Brazilian estimates Thursday, with Safras boosting their projection by 0.52 MMT to 179.28 MMT. This adjustment could influence global supply dynamics and potentially weigh on U.S. soybean demand.

Where Soybeans Stand Now

Mar 26 Soybeans closed at $10.57¾, up 4¾ cents. Nearby Cash settled at $9.87¼, up 5¼ cents. May 26 Soybeans added 4½ cents to close at $10.68¾. Jul 26 Soybeans climbed 5 cents to $10.81¼.

With Monday’s Martin Luther King Jr. Day holiday keeping markets closed during normal hours (reopening Monday evening), traders have time to digest whether soybeans’ Friday strength represents genuine conviction or a temporary bounce ahead of potential weakness tied to the export slowdown.