Soybeans Commentary

storck

Just My Opinion – Soybeans

Soybean Commentary

March Soybeans close 7 cents higher ($9.84 ¼), July 7½ cents higher ($10.05 ¾) and Nov 4 ½ cents higher ($10.00 ½)

March Soybean Meal closes $7.0 higher ($338.6), July $5.9 higher ($343.5) and Dec $4.4 higher ($339.5)

March Soybean Oil closes 12 pts lower ($32.16), July 13 pts lower ($32.56) and Dec 18 pts lower ($32.80)

Weekly Soybean Export Inspections – 1.419 M T. vs. 1.000-1.400 M T. expected

Weather concerns for Argentine soybean crop development coupled with strong looking weekly export inspections keeps the soybean and soybean meal markets strong. Soybean meal is clearly the leader as gains there far outpaced what the soybean market could muster. Inter-market spreading keeps the soybean oil market on the defensive and that in turn limits gains in the soybean market. Forecasts for the primary soybean regions of Argentina continue to show a warm and dry bias. I would hate to think what would be happening in the soybean complex if Brazil was having problems as well. So far Brazil is the opposite of Argentina; Argentina is losing crop size while Brazil is gaining crop size. The idea of a larger crop size in Brazil is barely having an impact on the higher meal market due to Argentina being twice the meal exporter vs. Brazil and the US. Argentina is slated to export 31.20 M T. of meal vs. Brazil at 15.25 M T. and the US at 11.07 M T.

Processor soybean bids stand tall as rising meal prices further enhance board crush margins. Interior locations involved with export appear to be softer. This is in keeping with what looks like a softer soybean export market. Soybean spreads within the crop year ran fractionally softer while old crop was a noticeable gainer vs. the new crop. The July/Nov spread is now 10 cents off of the low that was seen right at report time on the 12th. Interior offers to sell cash meal are mostly steady with a very slight firm bias. What are making the market here are the export values as they remain firm. Meal spreads are firm all the way out to the new crop.

As long as Argentine growing conditions remain in the forefront of concerns the meal and soybean markets will be biased to move higher. With tonight’s close the mid-$9.90’s is now being targeted for March soybeans. So far March meal is showing few signs that it is entering what appears to be formidable resistance; $338.0 on up. As of tonight’s close meal prices are entering various stages of overbought whether it be on daily technical data or inter-day technical data. I fully understand that weather markets will go higher than what we may feel reasonable; this appears to be one of those times. Bean oil continues to struggle despite what I feel the market is entering a critical support area; $32.00 to $31.85. It seems the inter-market spread, buying meal/selling oil, has a strangle hold on this market. Call me crazy but I’ll take a shot at buying bean oil on its first challenge of $31.85 (March).

Daily Support & Resistance for 01/23

March Beans: $9.78 – $9.93

March Meal; $332.3 – $341.5

March Bn Oil: $31.85 – $32.45

 

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