Soybean Commentary
March Soybeans close 9¾ cents lower ($10.57 ¾), July 9 cents lower ($10.73) and Nov 3½ cents lower ($10.25 ¼)
March Meal closes $5.2 lower ($343.5), July $3.5 lower ($348.4) and Dec $1.6 lower ($334.3)
March Bean Oil closes 2 pts lower ($35.13), July 1 pt lower ($35.62) and Dec 9 pts higher ($35.25)
Weekly Soybean Export Inspections – 1.290 M T. vs. 1.300-1.500 M T. expected
Now that the weather (and forecasts) have calmed down for Argentina the bean and meal markets correct to the downside. The word out of Brazil is that they are off to their fastest ever start to harvest. Yield reports out of Mato Grosso (Brazil’s largest soybean producing state) continue to be large; large enough to offset possible Argentine shortfalls. Bean oil receives some left-handed support from the lower bean and meal prices in the form of inter-market spreading. The bottom line to Monday’s price action was that the bull needs to fed every day and Monday just didn’t have anything on the menu.
Interior cash markets for both beans and meal are soft. Export markets for beans and meal are soft. Last week’s soybean rally brought out some pretty decent cash movement. These soft cash markets were reflected in the futures’ spreads – both bean and meal spreads ran soft. So here you have it – soft looking cash markets, soft looking spreads and now a soft looking flat price – sounds bearish for the time being.
Late last week the flat price of beans and meal advertised it was moving into a consolidation phase – after Monday’s price action it is now suggested the flat price of both is moving into a correction phase. Daily weather considerations in SA will dominate the day-to-day focus. Daily technical indicators are now suggesting the rally of last week is over. During last week’s rally March beans left an inter-day gap at $10.48 ¼ – that should be viewed as initial support for the current correction. The same can be said for $334.2 for March meal. If beans and meal are indeed moving into a corrective phase soybean oil will receive some left-handed support similar to what we saw today.
Daily Support & Resistance for 01/24
March Beans: $10.48 – $10.70
March Meal; $338.0 – $348.0
March Bn Oil: $34.80 – $35.60
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.