Soybean Commentary
March Soybeans close 5 ¾ cents higher ($10.75), July 4 ¾ cents higher ($10.88) and Nov 8 ¼ cents higher ($10.28 ¼)
March Meal closes $2.3 higher ($351.1), July $2.0 higher ($352.1) and Dec $3.7 higher ($334.9)
March Bean Oil closes 2 pts higher ($35.58), July 2 pts higher ($36.04) and Dec 6 pts lower ($35.37)
The trade’s focus remains the excessively wet areas of Argentina and that prompted some new highs for the current rally in the soybean and soybean meal markets. Forecasts, however, do suggest a drying trend developing by next week. Personally I have always had a hard time believing a “wet weather” market is sustainable vs. a “dry weather” market. It is my thought that it was the forecasts calling for drying by next week that was responsible for the late sell-off in the soybean and soybean meal markets on Wednesday. The bottom line for the near term – focus will continue to be weather forecasts for Argentina.
The interior soybean market is most definitely on the defensive with the recent 4-day rally. Not only is the US producer selling soybeans but so is the Brazilian and Argentine producer. Despite this bull spreads within the current crop year continue to show a minor tightening bias. The old crop/ new crop soybean spreads did some re-aligning (correcting) on Wednesday following Tuesday’s sharp rally. The cash market for soybean meal continues to be depressed. Wednesday’s spread action in the meal market was correcting some of Tuesday’s sharp rally. I realize that if Argentina has a short soybean crop it will mean better business for US meal exports but so far cash markets are not reflecting that. Board crush margins jumped dramatically higher with the meal rally – with these kinds of margins crushers will continue to give us a decent rate of crush and without a shortfall in Argentine production the meal basis will continue to be depressed.
New highs, new high closes for the soybean and soybean meal market. On the surface there is nothing bearish about that. What brings about some caution is the sharp rally that only took 4 days to accomplish. With that said the flat price is in line for some further consolidation if not correction. Inter-market spreading keeps the bean oil market under wraps. As long as the trades’ focus in soybeans and soybean meal the bean oil market will continue to stay under wraps.
Daily Support & Resistance for 01/19
March Beans: $10.60 – $10.83 (?)
March Meal; $344.0 ($341.0) – $355.0 (?)
March Bn Oil: $35.25 – $36.10
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