Soybean Commentary
March Soybeans close 3 ¼ cents lower ($9.83), July 3 ½ cents lower ($10.04) and Nov 5 cents higher ($10.00 ½)
March Soybean Meal closes $3.7 higher ($335.4), July $3.6 higher ($341.1) and Dec $2.3 higher ($337.1)
March Soybean Oil closes 60 pts lower ($32.56), July 61 pts lower ($32.94) and Dec 62 pts lower ($33.24)
Weekly Soybean Export Sales – old crop vs. 400-700 K T. expected – new crop vs. 0-100 K T. expected
Weekly Soybean Meal Export Sales – old crop vs. 150-450 K T. expected – new crop vs. none expected
Weekly Soybean Oil Export Sales – old crop vs. 8-35 K T. expected – new crop vs. none expected
Soybeans get caught between firm soybean meal and weakening soybean oil. The rumor that fueled yesterday’s bean oil rally (tax credits for bio-diesel blenders) was nowhere to be seen on Wednesday. Soybean meal continues to be firm from a strong looking US export market. Soybeans get caught in the middle of all this. Adding to the bean market’s hesitancy on Wednesday was story out of China talking about they may be looking at some anti-dumping involving US soybean imports. It’s just a story so far but with the ongoing pissing match between China and the US involving tin and steel from them and sorghum from us it does create some “what if’s” out there. Tomorrow CONAB will update the Brazilian soybean crop size; many feel we could see an increase of 2.0 M T. the other side of that coin is the USDA will update us on their ideas of Argentine soybean production; a 2.0 M T. reduction there is not out of the question. As far as US data is concerned most are looking for another hike in the US carryout due to additional cuts in export. Given the fact the USDA cut US exports by 65 million bu. last month I’m not sure we’ll see another round of export cuts. It is not out of the question for the USDA to hike crush. If there is going to be a surprise it could be an unchanged to slightly lower US soybean carryout. Adding to all of this – Argentina has been forecasted to see some timely rains in the current time frame as well as next week. If these do not develop as forecasted I’m sure the specs will come after the soybean and soybean meal markets. We’ll know more 24 hours from now.
I’m not seeing any changes in the interior cash soybean markets. The Gulf appears stable. Despite the easier soybean price action bull spreads were working. The idea there is the possibility of further cuts to the Argentine production coupled with higher soybean acres for next year. The ongoing soybean meal demand is helping to keep soybean spreads buoyant. Interior cash meal prices are starting to firm at selected locations. Meal for export continues to be firm as well. Meal spreads ran steady to a touch better in the nearby while advancing vs. the new crop.
From a technical point of view both meal and beans are honoring the resistance levels that were set up with last week’s sell-off. With the flurry of data coming from the different reporting agencies tomorrow as well as weather updates involving SA prices could go either way. Unfortunately I won’t be here to report on the outcome.
Daily Support & Resistance for 02/08
March Beans: $9.75 – $9.99
March Meal; $328.0 – $342.0
March Bn Oil: $32.30 – $33.10
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