Soybean Commentary
Nov Soybeans close 2 cents higher ($9.88), March 3 cents higher ($10.09 ½) and July 2 ¾ cents higher ($10.26 ¼)
Dec Soybean Meal closes $0.3 lower ($315.2), March $0.2 lower ($320.9) and July $0.2 lower ($325.9)
Dec Soybean Oil closes 35 pts higher ($35.37), March 35 pts higher ($35.75) and July 36 pts higher ($36.18)
Soybean Oil continues to be the primary strength within the soy complex. It’s all about demand for US based bio-diesel. Bean oil trades back up to levels not seen since early September. Soybean meal continues to dog it as competition from SA keeps US origin out of the ballpark. The daily trade in the soybean market has turned into a grinder as it is caught between the higher bean oil prices and the doggy looking meal price. This grinding type trade is no surprise since implied volatility has been running between 10 and 12 percent for what feels like forever ) at least the past few months). For what it is worth the trade is looking for a minor decreases in production that is expected to lead to a minor reduction in carryout. Larger analytical firms have been suggesting otherwise; a small increase in yield. I doubt the USDA will do much with US demand data and I also doubt we will see any changes to SA production estimates.
Interior cash soybean prices if not steady are creeping higher. Central Illinois processors show the best basis. River bids show a bias to improve but it remains a grinding type improvement. The Gulf basis has a firming bias as well. Jan forward spreads ran mixed to steady on the day. Offers to sell cash meal remain depressed. Meal spreads ran fractionally lower on the day.
The immediate trend in soybeans remains well defined in an up channel that started in mid-August. Currently prices are hugging the support line of the channel. Soybean oil, too, remains in an up channel. Unlike the higher channel for soybeans the bean oil market is in line to test the resistance side of its higher channel. Soybean meal charts have gone sideways after breaking down out of its higher channel nearly 3 weeks ago. I’m not sure the USDA can give us anything to change the current price action.
Daily Support & Resistance for 11/09
March Beans: $9.96 – $10.14
Dec Meal; $312.0 – $319.0
Dec Bn Oil: $34.60 – $36.00
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