Jan soybeans close 26 ½ cents higher ($10.20 ¼), March 26 ¼ cents higher ($10.28 ½) and July 24 ¾ cents higher ($10.41 ¼)
Dec Meal closes $9.3 higher ($319.7), Jan $9.3 higher ($321.9) and March $9.1 higher ($324.2)
Dec Bean Oil closes 59 pts higher ($34.64), Jan 62 pts higher ($34.93) and March 62 pts higher ($35.18)
Weekly Soybean Export Inspections – 2.666 M T. vs. 1.700-2.000 M T. expected
Speculative buying resumes with a vengeance on Monday. The initial strength came out of the Chinese markets. If you recall early last week they were big time sellers; last night they were big time buyers (almost sounds like lemmings to the sea). Weekly export inspections were great once again. I’m hearing that about 8.0 M T. of soybeans are on their way to Chinese ports. Outside markets (energy markets) added a boost as did the “I” talk (inflation) and a seasonal suggestion that prices rally into the Thanksgiving holiday. What appear to be good growing conditions in SA were mostly ignored.
The interior soybean basis continues mostly in a steady to higher mode. There are always exceptions; in this case the Ohio River was down 2 cents. The gulf market struggles to sustain any higher momentum despite the large shipments. Today’s posting was the lowest in the past month. Soybean spreads, however, firmed on the day in response to the speculative buying. Offers to sell cash soybean meal remain in the doldrums. Meal spreads, like soybean spreads, firmed in response to the buying that took the flat price sharply higher. The Board crush is suffering in response to the rally; both the Jan and March margins are around the 72 cent level. I see nothing dynamic about that.
So has anything changed in the fundamental supply-demand balance sheets? The USDA has already plugged in higher exports which we are seeing and that did not reduce the carryout.
I believe the majority of the current rally is technical in nature. Last week we spent the majority of the week bumping up against the 200 MA. We opened through that Sunday night and the market took off. The meal market has yet to challenge its 200 day MA; about another $3.5 higher. The bean oil market is respecting its interim reversal that was scored on Friday. Daily momentum indicators are clearly higher now. Shorter term indicators are almost overbought. With that said don’t be surprised to see prices move into a corrective mode on Tuesday.
Jan Beans: $10.05 – $10.25 Jan Meal; $315.0 – $327.0 Jan Bn Oil: $34.50 – $35.25
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