Soybean Commentary
Nov Soybeans close 8 cents higher ($9.89), March 8 cents higher ($10.09 ½) and July 8 ¼ cents higher ($10.26 ¼)
Dec Soybean Meal closes $3.8 higher ($317.4), March $3.6 higher ($322.9) and July $3.7 higher ($328.0)
Dec Soybean Oil closes 4 pts lower ($34.86), March 2 pts lower ($35.21) and July 1 pt lower ($35.59)
Weekly Soybean Export Sales – 1.967 M T. old crop vs. 1.450-1.850 M T. expected – 15.2 K T. new crop vs. 0-50 K T. expected
Weekly Soybean Meal Export Sales – 225.0 K T. old crop vs. 100-250 K T. expected – no new crop vs. none expected
Weekly Soybean Oil Export Sales – 27.0 K T. old crop vs. 8-30 K T. expected – no new crop vs. none expected
FC Stone suggests US soybean yield at 49.9 bpa – Informa suggests US soybean yield at 49.7 bpa – USDA last month at 49.5
Solid looking weekly export sales, chart based buying (technical) and the idea of low protein meal (better usage) all works together to rally bean and meal prices on Thursday. Despite a couple of private institutions suggesting a slightly higher yield on next week’s production update I think most in the trade are looking for a slightly lower yield. Cumulative weekly export sales for soybeans are lagging last year’s pace by 5.7 M T. It needs to be noted that the USDA in October suggested this year’s sales would exceed last year by 2.1 M T. The slow sales pace is due to record monthly exports out of Brazil. Their sales pace is expected to slow once we get into the first quarter of the New Year. The question becomes will the USDA lower export projections this early in the marketing year? I don’t think so.
Interior cash soybeans appear relatively quiet on Thursday. Deliveries against the November contract are roughly the same 50 that come out on first notice day. Soybean spreads ran flat within the current crop year; gained fractionally against the new crop. Offers to sell cash meal continue to be soft. Meal spreads however ran steady to fractionally better.
The up channel for soybeans that started in mid- August remains very much intact after recent tests of its support line. $10.04 (Jan) appears to be an initial target (I’m trading March so I’m looking at $10.14). Dec Meal can rally to the low $320’s before finding any decent looking resistance. The soybean oil chart is looking a bit toppy as it appears to be stumbling against the $35.00 level (Dec).
Daily Support & Resistance for 11/03
March Beans: $9.99 – $10.14
Dec Meal; $308.0 – $315.0
Dec Bn Oil: $34.10 – $35.10
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