Soybean Commentary
March Soybeans close ¾ cent higher ($9.68 ¾), July½ cent higher ($9.89 ½) and Nov¼ cent lower ($9.88 ¾)
March Soybean Meal closes $1.5 higher ($324.3), July $1.5 higher ($330.6) and Dec $1.2 higher ($330.1)
March Soybean Oil closes 28 pts lower ($32.51), July 28 pts lower ($32.89) and Dec 30 pts lower ($33.10)
USDA announces 130.0 K T. of new crop soybeans sold to unknown
Better than expected overnight rains in the northern half of Argentina had soybeans and soybean meal on the defensive in the early going on Wednesday. It should be said that the southern half, southern 1/3 of Argentina continues to have a dry bias. Forecasts going forward appear to be mixed as there is not a lot of agreement among the forecasters whether its short term ideas or longer term ideas. Keeping the soybean market in a minor state of “check” is the beginning of the Brazilian harvest and the idea that their crop is still growing in size. It was the meal market that brought the soybean market back to the plus side as the export market for US meal continues to strengthen. Bean oil continues to be subject to the whims of the palm market which continues to be on the defensive.
For the most part the interior soybean basis is maintaining a higher bias. Processors show the best bids reflecting very decent looking crush margins. The Gulf market for soybeans appears stable within shouting distance of its recent upper end. Soybean spreads ran mixed to fractionally better within the current crop year while old crop gains fractionally on the new crop. Offers to sell cash soybean meal in the interior read steady to marginally higher. The US meal export market, however, is the market that reads noticeably higher. Since mid-December the Gulf market for meal reads roughly $20 higher. Meal spreads ran fractionally better all the way out to the new crop.
Impressive looking price action for the meal market as it closes noticeably above recent interim highs ( the US meal market is all about the US being the best origination for global demand). With meal looking this good I have to think the soybean market will not be far behind despite the balky looking bean oil market. Bean oil struggles to hold at the $32.50 level. If bean oil continues to dog it soybeans will not be able to enjoy the full benefits of a higher meal market.
Daily Support & Resistance for 01/18
March Beans: $9.63 – $9.77
March Meal; $321.0 – $327.0
March Bn Oil: $32.25 – $33.00
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