Soybean Commentary
Sept Soybeans close 8 ¾ cents higher ($9.53), Nov 10 cents higher ($9.60 ½) and March 9¾ cents higher ($9.79 ¼)
Sept Meal closes $5.2 higher ($300.3), Dec $5.4 higher ($305.4) and March $5.0 higher ($310.0)
Sept Bean oil closes 12 pts lower ($34.72), Dec 10 pts lower ($35.09) and March 10 pts lower ($35.50)
USDA announces 167.4 K T. soybeans sold to Mexico
Weekly Export Sales – Soybeans – old crop (2017/18) vs. 1.000-1.300 M T. expected – Soybean Meal – old crop (2016/17) vs. 0-150 K T. expected; new crop (2017/18) vs. 50-250 K T. expected – Soybean Oil – old crop (2016/17) vs. 0-20 K T. expected; new crop (2017/18) vs. 0-20 K T. expected
It was all about the soybean meal market on Wednesday. Cash meal markets are starting to tighten as processors walk the tight wire between old crop and new crop. Old crop is getting tight and the new crop is not quite yet available. The strength in meal demanded soybean go along for the ride higher. Soybean oil, which has its own bull case from the bio-diesel situation, took a back seat as inter-market spreading kept a lid on prices. The FSA yesterday afternoon released their latest on soybean acres enrolled in government programs; 88.666 million vs. 89.5 planted. A spread this tight this early, I’m told, will suggest higher acres on the next USDA monthly production update.
With one exception the interior cash soybean market shows a defensive look. Processors continue to show the best bids but I get the idea they are starting to waver as the new crop gets closer and closer. Despite the continued defensive look from the cash market soybean spreads improved with the flat price rally. How much of that spread improvement can be tied to the short covering remains to be seen. Meal spreads firmed along with the firming cash market.
Today’s inside day of Tuesday does not negate the new interim downtrend for soybeans. The however here is the soybean meal market did negate the idea of a new interim downtrend. Soybean oil was seen struggling at recently established resistance. Put it all together and it suggests trading range markets. With all of the different push/pull within the complex I can’t up with a better rationale. How do I trade this scenario – I look at each market within the soy complex separately and fade 2-3 inter-day extremes.
Daily Support & Resistance for 09/14
Nov Beans: $9.48 – $9.70
Dec Meal; $301.0 – $309.0
Dec Bn Oil: $34.60 – $35.50
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.