Soybean Commentary
March Soybeans close 7 ¾ cents higher ($10.34 ¼), July 8 cents higher ($10.55), and Nov 3 cents higher ($10.28)
March Soybean Meal closes $1.5 higher ($378.0), July $3.2 higher ($379.8) and Dec $2.4 higher ($362.8)
March Soybean Oil closes 21 pts higher ($32.07), July 23 pts higher ($32.45) and Dec 21 pts higher ($32.93)
Whatever selling Tuesday’s performance suggested was seen Tuesday night as the Wednesday day session saw firm prices for the entire session. Tuesday’s highs were challenged in old crop meal and beans and so far those highs are standing in. New crop, however, saw new highs for the current rally. Bean oil sees some minor follow through buying as palm oil productions slip just enough to entice some bottom picking. If Argentina is going to be a disaster bean oil will eventually sustain a rally. Going forward the focus will continue to be Argentina’s forecast. I doubt the USDA can say anything to overshadow what’s happening in Argentina. For what it is worth trade surveys suggest the USDA will re-affirm their original idea that we will have 91.0 million acres planted to soybeans for the coming year.
Interior soybean basis continues to be under the gun and that holds true for the Gulf as well. The US export market continues to retreat as focus has moved to Brazil. China should be back in the saddle tomorrow so it will be interesting to see if we get any sales’ announcements (I’m not holding my breath). Despite the defensive looking cash markets bull spreads in soybeans continue to stand in. I did see some weakening in the nearby by cash meal markets. This is being attributed to recent cash soybean movement. Bear spreads were featured within the crop year but the summer months of meal continue to gain on the new crop.
It continues to be all about Argentine forecasts and they continue to show a dry bias. The Argentine growing season is entering the equivalent of our August and we all know soybeans are made or broken during August. Unless forecasts change the worst case scenario for the bean and meal markets is consolidation against our recent upper end (sell stops may be building below today’s lows). For what it is worth – check out the double bottom in soybean oil. Tonight’s close is now above the previous 5 days of trade. From a technical point of view any 20-25 point set back should be well received.
Daily Support & Resistance for 02/22
March Beans: $10.24 – ???
March Meal; $370.0 – $386.0 (?)
March Bn Oil: $31.75 – $32.50
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