Soybean Commentary
Nov Soybeans close 4 ¼ cents lower ($9.71 ¼), March 3 ¾ cents lower ($9.93) and July 4 ¼ cents lower ($10.10)
Dec Soybean Meal closes $3.3 lower ($312.1), March $3.2 lower ($317.2) and July $3.2 lower ($322.3)
Dec Soybean Oil closes 24 pts higher ($34.50), March 24 pts higher ($34.88) and July 24 pts higher ($35.28)
Weekly Soybean Export Sales – 2.129 M T. old crop vs. 1.200-1.600 M T. expected – 1.0 K T. new crop vs. none expected
Weekly Soybean Meal Export Sales – 142.9 K T. old crop vs. 100-250 K T. expected – no new crop vs. none expected
Weekly Soybean Oil Export Sales – 27.9 K T. old crop vs. 8-30 K T. expected – no new crop vs. none expected
Despite good looking weekly soybean export sales the soybean market could not withstand the pressure from the meal market. The rally in the US Dollar continues to make SA origin for meal that much more attractive. Strength in bean oil did little to offset the weakness in the meal market. Inter-market spreading may have added to the weakness in meal. One would think that after next week soybean harvest pressure should be on the decline given the 70% completion rate as of last Sunday. Tomorrow, Friday, is November soybean option expiration – at the beginning of the week the strikes with the biggest OI were the $10.00 and the $9.60. Little did I think at the beginning of the week the $9.60 strike would come into view.
Decatur, Il still has the best posted interior soybean basis. I do see some improvements at selected river locations but overall the interior soybean basis (sans Decatur, IL) is best as ugly. Last night’s posting at the Gulf was at a season to date low. Spreads ran mixed within the old crop while old crop loses to new crop. Next Tuesday is first notice day for November soybean deliveries – recent weakness in the nearby spread is reflective of that. Offers to sell cash meal continue to search for buyers. Needless to say meal spreads stay wide and widening further against the new crop.
Soybeans and soybean meal are now at two week lows. If the uptrend that started in mid-late August is to hold together there shouldn’t be that much left to the current sell-off. Soybean oil is just a handful of points away from its monthly high. The rhetoric around bio-diesel continues as the latest has US Senators from oil refinery states asking the President for a meeting to discuss what they feel are unfair terms (here’s another crack for the President to crawl out of).
Daily Support & Resistance for 10/27
March Beans: $9.85 – $10.03
Dec Meal; $309.0 – $316.0
Dec Bn Oil: $34.10 – $34.80
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.