Nov Soybeans close 12 ½ cents higher ($10.01 ¾), Jan 12 ¾ cents higher ($10.11 ¼) and March 12 ¾ cents higher ($10.18 ¼)
Dec Meal closes $3.8 higher ($315.7), Jan $3.8 higher ($317.6) and March $3.4 higher ($318.7)
Dec Bean Oil closes 52 pts higher ($35.31), Jan 52 pts higher ($35.57) and March 54 pts higher ($35.78)
USDA announces 116.1 K T. soybean meal to Dominican Republic
Two weeks ago the trade was citing demand as their rationale for higher prices in the bean and meal markets. Last week the rationale was supply. This week the rationale is back to demand. Bean oil was the initial upside leader on Tuesday as Malaysian palm oil roared to 2 ½ year highs. Product advances ran almost even on the day; meal was a very slight gainer over bean oil. As of this writing its up to the USDA now – the trade anticipates a higher crop size – the unknown is if the USDA raises demand to the point it offsets the hike in supply.
Interior basis levels are like the corn market’s – harvest is just about over and anyone that feels they did not get bought what they earlier anticipated is now hiking their basis in hopes of securing more soybeans. The gulf is easier in response to lower freight rates. Bean deliveries against the November contract continue to circulate – we’re not talking big numbers here; 150-160. The fact remains that these beans cannot find a home. Soybean spreads ran mostly unchanged on the day. Offers to sell cash soybean meal continue to be soft in the interior while the export market pokes its nose up in response to the export sale announcements yesterday and today. Meal spreads improved on the day.
After Monday and Tuesday’s price action it’s clear to me that the trade wants to long the soybean complex. Bean oil has a legitimate story due to the strength in the World veg oil markets. US soybeans have great demand but
then again we have a great supply. SA is getting planted in an extremely timely manner. Demand for US soybean meal has been iffy in the export market but is starting to show signs of improvement. I do think if we are to have a roaring bull market in the bean and meal markets we are going to have to have scares out of SA and so far that hasn’t been in the cards. If the USDA can show demand is starting to outpace supply we may get something sustainable on the upside. I hate to say it but it’s all up to the USDA now.
Jan Beans: $9.90 – $10.30 (?) Dec Meal; $308.00 – $322.0 Dec Bn Oil: $34.80 – $36.00
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