Soybean Commentary
Nov Soybeans close 2 ½ cents lower ($9.72 ¾), March 1 ¾ cents lower ($9.95) and July 1¼ cents lower ($10.12 ¼)
Dec Soybean Meal closes $0.2 higher ($312.3), March $0.2 higher ($317.4) and July $0.2 higher ($322.6)
Dec Soybean Oil closes 16 pts lower ($34.68), March 16 pts lower ($35.05) and July 16 pts lower ($35.44)
Weekly Soybean Export Inspections – 2.505 M T. vs. 2.000-2.500 M T. expected
Weekly Soybean Progress – 83% harvested vs. 83% expected vs. 84% 5-year average
The Sunday night trade tries to suggest we have a possible weather play in SA. The Monday day trade says they are not buying into that. YES, there are some areas in SA that suggest they are too wet while other areas are too dry. Forecasts, on the other hand suggest that the current pattern is slowly but shifting north; the too wet areas will be drying and the too dry areas will get moisture relief. Adding to the day session’s sell off is the possibility of large deliveries against the November contract tomorrow morning. As one looks at the interior cash markets (and the Gulf) the best sale out there is the Board. If deliveries are on the light side it is due to the idea the commercial holder does not want to risk the chance of losing the carry he has already locked into the price structure. I did see a slight shift from the recent bean oil/bean meal spreading. I think that was a combination of profit taking on the inter-market spread as bean oil has been a noticeable gainer in recent days as well as further talk that the protein count in the processed meal is down leading to the possibility of better usage down the road. It has to be noted that world importers of soybean meal are still getting a better deal with SA origin.
River locations dealing with the export market are seeing better basis levels. Elsewhere basis locations remain nothing to write home about. The Gulf market has been trying to firm. As harvest winds down for soybeans one would expect river locations as well as the Gulf to continue to show improvement. It will be interesting to see how deliveries pan out as soybean futures’ spreads are near or at their widest levels to date. Offers to sell cash meal remain in the dumper. Meal spreads ran mostly unchanged on the day.
Soybeans and soybean oil continue to be channel bound; the up channel that started back in early September for soybeans and the one that started in October for bean oil. Soybeans are challenging the support of its channel while bean oil is challenging the resistance of its channel. Soybean meal has broken out of its channel favoring the down side. The bottom line is that meal and beans are honoring suspected interim support levels while bean oil may be showing signs upside exhaustion.
Daily Support & Resistance for 10/31
March Beans: $9.85 – $10.03
Dec Meal; $309.0 – $316.0
Dec Bn Oil: $34.10 – $34.95
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