Soybean Commentary
March Soybeans close 5 ¾ cents lower ($10.49 ½), July 5 ¼ cents lower ($10.65 ¾) and Nov 2 ¼ cents lower ($10.23 ¼)
March Meal closes $0.9 lower ($342.4), July $0.9 lower ($347.5) and Dec $0.1 higher ($334.8)
March Bean Oil closes 40 pts lower ($34.47), July 38 pts lower ($34.98) and Dec 30 pts lower ($34.80)
Weekly Export Sales – Soybeans – 539.4 K T. old crop vs. 450-650 K T. expected; 126.0 K T. new crop vs. 0-50 K T. expected – Soybean Meal – 276.8 K T. old crop vs. 120-250 K T. expected; 6.1 K T. new crop vs. none expected – Soybean Oil – 49.5 K T. old crop vs. 10-25 K T. expected; no new crop vs. none expected
Weekly export sales for soybeans were deemed a non-event as they were mid-range of expectations. Soybean meal and soybean oil sales were deemed solid as they came in above expectations. The solid meal sales kept that market alive. Despite the strong sales for soybean oil that market got hit again over concerns around the renewable fuels program. I’m told that bean oil refining for bio-fuel is at breakeven levels. The bottom line is that the soybean market continues to get caught between relatively steady meal prices vs. declining bean oil prices. As I mentioned in the corn comment the weather in SA has no real extremes to it at this time. BAGE (Buenos Aires Grain Exchange) came out with their first soybean crop size estimate of the season – 53.5 M T. The USDA recently had them down for 57.0 M T. This number was released around the noon hour and the reaction was minimal.
The interior soybean basis continues to show a defensive tone. The Gulf ran mostly steady on the day. Soybean spreads continue to show a widening bias (more carry) all the way out to the new crop. Offers to sell cash soybean meal remain depressed for both domestic usage and for export. Meal spreads within the current crop year ran steady to easier while old crop continues to lose to new crop.
Flat price soybeans (old crop) are giving suspected support levels a good test. Soybean meal, however, continues to honor suspected support levels. Bean oil blows through suspected interim support levels. It was the lower bean oil prices that had the most influence on the price of soybeans Thursday. As long as bean meal continues to honor suspected interim support levels the soybean market will do no worse than a sideways to lower grind. If the meal market gives up the ship the soybean market will accelerate lower. It should be noted that daily technical indicators for the entire soybean complex read lower. As long as the weather in SA cooperates the bias will remain for lower prices.
Daily Support & Resistance for 01/27
March Beans: $10.44 ($10.35) – $10.61
March Meal; $339.0 ($334.0) – $347.0
March Bn Oil: $34.00 – $34.80
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