Soybean Commentary
Nov Soybeans close 26 ¾ cents higher ($9.92), March 26 ½ cents higher ($10.12) and July 25 ¾ cents higher ($10.29 ½)
Dec Soybean Meal closes $11.4 higher ($326.3), March $11.3 higher ($331.1) and July $10.9 higher ($335.6)
Dec Soybean Oil closes 17 pts higher ($33.28), March 12 pts higher ($33.68) and July 12 pts higher ($34.12)
Weekly Soybean Export Sales – old crop vs. 900 K – 1.200 M T. expected – new crop vs. none expected
Weekly Soybean Meal Export Sales – old crop vs. -200+0 K T. expected – new crop vs. 100-300 K T. expected
Weekly Soybean Oil Export Sales – old crop vs. -30+0 K T. expected – new crop vs. 5-22 K T. expected
Based on expectations the soybean production and supply demand update was deemed mildly friendly (see October USDA attachment). If only “mildly friendly” why the sharp rally? I believe the trade was positioned to be long oilseeds/short feedgrains. The beginning to the Brazilian growing season is off to a shaky start. If this year is going to be similar to the previous couple of years the USDA will eventually draw down the carryout data noticeably below what they are posting right now. For what it is worth – I think the expectations for weekly export soybean sales are too high as China was on holiday for most of the reporting week.
Interior processor bids are steady. River bids for soybeans are steady to higher. The Gulf continues to ease. Bull spreads were improving fractionally up front; more noticeably vs. the new crop. Offers to sell cash soybean meal remain depressed. Meal spreads saw similar improvement to those in the soybean sector.
The trade went into this report wanting to be long and they took mildly supportive data and goosed the daylights out of the market. Given the sharp degree of today’s rally some backing and filling may be warranted on Friday. What today’s rally suggests to me is that more and more focus will be on the development of the Brazilian growing season. As long as were seeing weather extremes in Brazil, too wet in the southeast and too dry in the center west, breaks should be well received.
Daily Support & Resistance for 10/13
Nov Beans: $9.80 – $10.10
Dec Meal; $320.0 – $332.0
Dec Bn Oil: $33.00 – $33.90
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