Soybean Commentary
March Soybeans close 3 ¼ cents lower ($10.55 ¼), July 2 ¾ cents lower ($10.71) and Nov ½ cent lower ($10.25 ½)
March Meal closes $0.3 higher ($343.3), July $0.4 higher ($348.4) and Dec $0.6 higher ($334.7)
March Bean Oil closes 41 pts lower ($34.87), July 39 pts lower ($35.36) and Dec 30 pts lower ($35.10)
Weekly Export Sales – Soybeans – old crop vs. 450-650 K T. expected; new crop vs. 0-50 K T. expected – Soybean Meal – old crop vs. 120-250 K T. expected; new crop vs. none expected – Soybean Oil – old crop vs. 10-25 K T. expected; new crop vs. none expected
It was a tight trading range day for the soybean market as it was caught between a steady meal market vs. a failing soybean oil market. I think most of the support in meal was from inter-market spreading against declining soybean oil prices. Soybean oil suffers from falling competing veg oils as well as rhetoric around the renewable fuels program (will it be renewed as it currently stands or will the new administration tweak it and by how much). The weather scenario in SA has seen a slight change – some would like to say too much over the near term for the harvest ready areas of Brazil. Argentina is currently drying out and forecasts don’t call for anything too extreme for the near term.
Only a couple of changes are being noted within the interior soybean basis – I’m showing 2 river locations involved with export showing a better basis. The Gulf market is basically in the same range it has been dating back to late last week.
Soybean spreads continue to show a bias to additional carry. Offers to sell cash soybean meal continue to be soft for both domestic use and for export. I’m being told the US is virtually out of the ballpark when it comes to being competitive for export.
The daily price action for soybeans still looks like a very orderly downflag. March bean prices are still honoring the suspected minor support at the $10.50-$10.45 level. The price action for soybeans meal still looks like an interim top has been formed and today’s inside day of Tuesday does not negate this look. To negate this look March meal minimally needs to close above the $346.0 level. If March meal takes out Tuesday’s low ($339.0) a move down to the $330.0 level will be expected. The price action in bean oil is advertising lower prices. If $34.50 (March) is taken out the next stop is $34.00 and if that falls be the wayside something closer to $33.00 will be expected. Thursday is export sales day – I have to think direction will come from whatever they show.
Daily Support & Resistance for 01/26
March Beans: $10.48 ($10.41) – $10.65
March Meal; $339.0 ($335.0) – $348.0
March Bn Oil: $34.50 (?) – $35.25
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