Soybean Commentary
March Soybeans close 10 ¾ cents lower ($9.85), July 10 ¼ cents lower ($10.06) and Nov 6 ¾ cents lower ($10.04 ½)
March Soybean Meal closes $3.8 lower ($334.0), July $3.4 lower ($340.3) and Dec $2.9 lower ($336.2)
March Soybean Oil closes 17 pts lower ($32.90), July 17 pts lower ($33.31) and Dec 11 pts lower ($33.66)
Weekly Soybean Export Sales – 358.9 K T. old crop vs. 600 K – 1.000 M T. expected – 50.7 K T. new crop vs. 0-200 K T. expected
Weekly Soybean Meal Export Sales – 474.8 K T. old crop vs. 150-350 K T. expected – -7.2 K T. new crop vs. none expected
Weekly Soybean Oil Export Sales – 58.8 K T. old crop vs. 8-35 K T. expected – no new crop vs. none expected
FC Stone suggests the Brazilian soybean crop is 111.08 M T. vs. CONAB las month at 110.4 M T. vs. USDA at 110.0 M T.
The Buenos Aires Grain Exchange (BAGE) suggest the Argentine soybean crop is 51.0 M T. vs. their previous estimate of 54.0 M T. vs. USDA at 56.0 M T.
Forecasts for Argentina suggest better moisture 10 days out. I really haven’t seen the forecasted big rains hit yet in the harvest ready areas of Brazil. Weekly export soybean sales were some of the lowest of the season while the weekly export soybean meal sales were some of the best of the season. The trade chose to trade the poor soybean sales report as well as the extended forecast for Argentina. Sell stops were elected mid-morning for both beans and meal but prices were able to rebound smartly; finishing right at the levels the sell stops previously sat at. I think the BAGE report had something to do with the rebound. Now we get to figure out if this was just a shake out of the “johnny-come-lately” longs or is the bean and meal markets really breaking down.
A prominent Illinois processor noticeably increases his bid for beans. River locations involved for export show a firm bias. The Gulf basis shows a somewhat firm bias. Despite what appears to be a relatively firm cash market soybean spreads were on the defensive all the way out to the new crop. Interior cash soybean meal offers have softened while export prices stay firm. The strong looking weekly export soybean meal sales substantiates the strong export market. Despite this meal spreads ran with soybean spreads; soft all the way out to the new crop.
So – did the bean and meal markets just witness a “seek out and destroy” with today’s sell stop activity? It’s hard to tell from a price action perspective as prices finished right where the sell stops were elected. My thought is that until we get a better handle on the Argentine growing situation we’ll be in for some erratic price action. After today’s price action daily soybean and soybean meal charts are suggesting we should be selling rallies.
Daily Support & Resistance for 02/02
March Beans: $9.80 – $9.95
March Meal; $332.0 – $338.0
March Bn Oil: $32.60 – $33.25
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