Soybean Commentary
March Soybeans close ¾ cent higher ($10.58 ½), July¾ cent higher ($10.73 ¾) and Nov¾ cent higher ($10.26)
March Meal closes $0.5 lower ($343.0), July $0.4 lower ($348.0) and Dec $0.2 lower ($334.1)
March Bean Oil closes 15 pts higher ($35.28), July 13 pts higher ($35.75) and Dec 15 pts higher ($35.40)
USDA announces 112 K T. soybeans sold to Mexico (42 K T. old crop; 70 K T. new crop) and 163 K T. soybeans sold to unknown (103 K T. old crop; 60 K T. new crop)
Informa suggests next year’s planted soybean acreage will be 88.647 million acres vs. 83.433 last year
The soybean market ranged from 10 higher Monday night to 7 lower during the day Tuesday only to finish fractionally better. The soybean meal market ranged from $2.5 higher Monday night to $4.0 lower during the day on Tuesday only to finish $0.5 lower on the day. Soybean oil ranged from 43 pts higher Monday night to only 14 pts higher during the day on Tuesday. What’s it all mean – rallies get sold but no one is yet willing to be short in the hole. Weather worries in SA have been put on the back burner for now. So now we focus on demand and we are beginning to lose it to Brazil as their harvest ramps up. Some of the harvest ready areas in Brazil will suffer slowdowns from time to time due to moisture but extreme slowdowns are not expected. I’m being told that Brazilian exporters are getting almost aggressive with their FOB offers.
The interior soybean basis levels run mostly unchanged on the day. I saw one Illinois river location bump its bid by 3 cents – all other locations ran unchanged. The Gulf basis for soybeans recouped Monday’s losses to finish unchanged with Friday’s posting. Offers to sell cash soybean meal continue to be depressed for both domestic and export usage. March beans lost ground to May beans while May beans gain on its future months while July beans ran unchanged all the way out to new crop. Meal spreads ran steady to fractionally easier.
On Monday afternoon I suggested the soybean market had gone into a “corrective” phase. So far the past 4 days have given us a very orderly looking downflag. Daily momentum indicators remain on the verge of rolling over. The soybean meal market looks more like a top vs. a downflag (as goes the meal so go soybeans??). I’m not quite sure what to call the price action in the bean oil market – the last couple of days look like an upflag while the longer term formation looks like a “head & shoulders” top. Without weather problems in SA rallies throughout the complex should probably be sold.
Daily Support & Resistance for 01/25
March Beans: $10.48 – $10.68
March Meal; $338.0 – $347.0
March Bn Oil: $34.80 – $35.60
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