Soybean Commentary
Nov Soybeans close 13 cents lower ($9.71 ¼), March 12 ¾ cents lower ($9.90 ¾) and July 11 ¾ cents lower ($10.06)
Dec Soybean Meal closes $4.7 lower ($314.3), March $4.4 lower ($319.3) and July $4.2 lower ($324.0)
Dec Soybean Oil closes 21 pts lower ($34.01), March 21 pts lower ($34.41) and July 19 pts lower ($34.77)
Weekly Soybean Export Inspections – 1.030 M T. vs. 1.000-1.300 M T. expected
Weekly Soybean Crop Rating & Progress – 60% GE (+1%) vs. 59% expected vs. 73% year ago – 63% Dropping Leaves vs. 63% 5-year average – 10% Harvested vs. 11% expected vs. 12% 5-year average
The onset of harvest coupled with forecasts for moisture for some of the drier areas of Brazil had the soybean and soybean meal markets giving back most of last Friday’s gains. Friday’s price action was deemed an interim buy signal. It needs to be noted that Monday’s price action in these two markets was an inside day of Friday so from a technical standpoint that interim buy signal was not negated. Monday was one of the few days there was not an USDA soybean export sale announcement. For the time being I don’t think the recent Chinese demand is going to go away as they lag last year’s sales pace by 5.1 M T. Soybean oil continues to grind lower away from the highs seen in the first week of September. Palm oil’s recent price action has been weighing in bean oil prices as had the unwinding of long bean oil/short bean meal spreads. For what it is worth the USDA will set last year’s carryout with their quarterly soybean stocks figure on Friday. The average trade guess is 339 million bu. vs. the USDA Sept 12th’s figure of 345 million bu.
The interior soybean basis if not steady is noticeably lower; especially along the river that feeds to the Gulf. High freight rates coupled with the onset of harvest is most responsible. It has to be noted that during the recent flat price rally soybean and soybean meal spreads have gone in the opposite direction; makes one think twice about the balance of supply vs. demand.
Late last week the soybean market challenged levels that it broke down from in late July. The immediate trend still reads higher despite today’s lower close. It is my opinion that we would need to see Nov beans close below $9.60 to turn the current uptrend to lower. The soybean meal picture is not too dissimilar. From a time frame I would like to think bean oil has gone low enough but so far the price action has yet to convince me. For the near term $33.60 should be low enough for Dec bean oil.
Daily Support & Resistance for 09/26
Nov Beans: $9.65 – $9.81
Dec Meal; $310.0 – $318.0
Dec Bn Oil: $33.80 ($33.60) – $34.60
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