Soybean Commentary
March Soybeans close 5 ½ cents higher ($10.17 ¼), July 5 ½ cents higher ($10.37 ½), and Nov ¾ cent higher ($10.20)
March Soybean Meal closes $4.7 higher ($369.9), July $3.5 higher ($369.5) and Dec $0.1 higher ($355.5)
March Soybean Oil closes 23 pts higher ($31.80), July 22 pts higher ($32.22) and Dec 23 pts higher ($32.72)
Weekly Soybean Export Sales – old crop vs. 450-750 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. 10-30 K T. expected – new crop vs. none expected
There is nothing new here – the Argentine crop size remains in question due to the ongoing drought type conditions in the center south soybean regions of that country. Forecasts continue to suggest a dry bias. Harvesting in Brazil is ongoing but conditions are such in Argentina it makes one wonder if the strong Brazilian crop can offset what appears to be a shrinking Argentine crop. I believe BAGE (Buenos Aries Grain Exchange) will be out mid-morning tomorrow with their latest updates. Last Thursday they suggested they were looking at a 50.0 M T. crop (can’t believe the USDA came in at 54.0 M T.) and since then conditions have not gotten any better.
Cash crush margins as well as Board crush margins continue to strengthen. This allows processors to stand in with their bids for cash beans. The export market for US origin slows as World focus moves to recently harvested Brazilian origin. It appears to be clear to me that US origin has fallen out of favor with the Chinese. I’m not sure if its trade issues or quality issues but for sure they don’t want our soybeans. Nearby soybean spreads (within the crop year) don’t much while old crop/new crop has come back into vogue. The sluggishness of the old crop spreads suggest we have the product to meet whatever comes our way in case of a disastrous Argentine crop. Interior cash meal offers are poking their heads up. The export market for US meal continues to strengthen. Nearby meal spreads are improving but as one adds time the meal spreads are just as hot as the flat price.
Anybody out there want to stand in front of the meal market? I don’t – I can’t even make a case that the market is overbought. We may run into periods of inter-day or intra-day overbought but that can easily be alleviated with an easier overnight trade such as we saw this past evening. As goes the meal market so will go the soybean market. Soybean oil continues to get beat up from inter-market spreading. If the Argentine soybean crop becomes a total bust bean oil will eventually catch a bid. I would like to think it has gone low enough for now. WE have a three day weekend coming at us – that may spark some profit taking if Thursday brings us another spike higher. My bottomline – nothing in the recent price action suggests the bean and meal rallies are over.
Daily Support & Resistance for 02/15
March Beans: $10.05 – $10.30 ($10.35)
March Meal; $362.0 – ???
March Bn Oil: $31.50 – $32.20
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