Soybean Commentary
March Soybeans close 9 cents lower ($9.69 ¾), July 8 ½ cents lower ($9.91 ¼) and Nov 7 ½ cents lower ($9.91 ½)
March Soybean Meal closes $4.4 lower ($327.0), July $4.8 lower ($333.3) and Dec $2.9 lower ($332.3)
March Soybean Oil closes 1 pt lower ($32.50), July unchanged ($32.92) and Dec 2 pts lower ($33.23)
Weekly Soybean Export Inspections – 1.303 M T. vs. 700 K – 1.000 M T. expected
USDA announces 132.0 K T. of old crop soybeans sold to Unknown and 66.6 K T. of new crop soybeans sold to Unknown
Timely rains are being forecasted for central southern Argentina later this week and again next week. After Friday’s CFTC Commitment of Traders report the funds are no longer considered “too short”. It was thought funds had 18 K contracts of soybeans for the reporting period between Jan 23rd and the 30th – The CFTC is suggesting spec funds covered 62 K shorts. The anti-dumping probe against the US involving sorghum now has traders wondering if that could spread to China boycotting US beans. China has clearly shown it is favoring Brazilian origin citing better quality. It was early in November when China announced restrictions against US bean cargoes having more than 1% FM. The bottom line is that the US is losing market share. Yes, meal export demand has been quite good but the last Census crush data suggested we have more than enough meal to meet that demand.
The interior soybean basis has taken on a mixed look on Monday. River locations flip-flop back and forth depending on which locations needs beans vs. locations that don’t. Soybean processors, like corn processors, show the best bids out there. The best description of the Gulf is stable. Soybean spreads were leaking within the old crop as well as losing ground to the new crop. Not much appears to be happening with the meal basis whether it’s for domestic or for export. Meal spreads ran mixed to better within the crop year while old crop loses to the new crop.
The interim trend for both soybeans and soybean meal has clearly moved to lower. The recent up-flagging motion in bean oil is now well on its way to rolling over. As of this writing I’m with the thought the complex will sustain the current depressed look as the trade waits to see how the forecasts for SA develop. On Thursday the USDA will update both US and World Supply-Demand. The US carryout is projected to rise slightly while the World carryout is projected to decline slightly.
Daily Support & Resistance for 02/06
March Beans: $9.64 – $9.78
March Meal; $324.0 – $330.0
March Bn Oil: $32.25 – $32.75
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