Soybean Commentary
Nov Soybeans close 7 ¾ cents lower ($9.63 ½), March 7 ¼ cents lower ($9.83 ½) and July 6 ½ cents lower ($9.99 ½)
Dec Soybean Meal closes $1.2 lower ($313.1), March $1.2 lower ($319.3) and July $0.8 lower ($323.2)
Dec Soybean Oil closes 55 pts lower ($33.45), March 55 pts lower ($33.86) and July 54 pts lower ($34.23)
The onset of harvest, coupled with a weakening cash market, continues to weigh on the soybean market. Early in the session soybean meal was the weak link vs. bean oil but at mid-session that shifted. I’m told the EPA may have the ability to cut back on the bio-diesel mandate due to economic concerns. Granted the meal market was able to finish with only minor losses the losses in bean oil were enough to keep the soybean market depressed. Early yield reports, for the most part, are coming in higher than expected especially given the dry weather we’ve had in the month of September. On Friday the USDA will set the carryin; the average trade guess is 338 million bu.; 7 million bu. below the last projected carryin. The USDA is also scheduled to update last year’s soybean crop size; the average trade guess is 4.305 billion bu., just 2 million bu. what the USDA has been using all year.
The interior cash soybean market continues to be under pressure and that’s all about the onset of harvest. Soybean spreads are at their widest levels to date. Yes, weekly export sales have been pretty good lately but we still lag behind last year by a noticeable amount. This is not to say we can’t catch up within a few weeks but at this point it’s speculation. Next week is Golden Week in China. I have to think we won’t see much sales activity with them during that week. With that said it won’t surprise to see another spate of business with them before this week is out especially if the soybean market continues to trade lower as we move through this week.
The current technical look at the bean and meal markets are trying to advertise they are moving into a trading range affair for the near term. The meal market (Dec) is trying to show some evidence of support at the $310 level. If the meal market can stand in the soybean market will too try and support no matter if the bean oil market continues to sink. Remember; the meal market is the deal.
Daily Support & Resistance for 09/27
Nov Beans: $9.55 – $9.73
Dec Meal; $309.0 – $318.0
Dec Bn Oil: $32.95 – $33.90
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