Soybean Commentary
March Soybeans close 2 cents lower ($10.34 ¼), July¾ cent lower ($10.55 ¼) and Nov 2 ½ cents higher ($10.30 ½)
March Soybean Meal closes $1.7 higher ($377.2), July $1.0 higher ($378.8) and Dec $0.5 lower ($361.8)
March Soybean Oil closes 26 pts higher ($32.62), July 30 pts higher ($33.03) and Dec 27 pts higher ($33.44)
USDA announces 132.0 K T. of soybeans sold to China
Weekly Soybean Export Inspections – 761.9 K T. vs. 600-900 K T. expected
Over the weekend rains in Argentina favored the western edges of recent concern. This allowed soybean and soybean meal prices to gap higher Sunday night. New highs for the rally were seen in the soybean futures, both for old crop and new crop. The “but” is they did not close in new high ground. Old crop soybean meal challenged last week’s highs but failed to eclipse them. New crop meal made new highs for the current rally but did not close in new high ground. Forecasters, depending on which ones you want to listen to, are suggesting some limited moisture later this week in the areas of concern as well as better moisture in the latest 6-10 forecast. Soybean oil rallies with the rest of the complex in the early going and wound up showing the best advances on the day as the late sell-off in beans and meal gave some left-handed support from the unwinding of inter-market spreads.
Interior cash soybean markets give us a mixed look. Locations involved with export are mixed as some show an easier basis while others show some strength. Processors, however, are showing an easier basis. The Gulf continues to be firm from last week due to logistical problems getting product down there. I would think the Gulf would be even stronger if it weren’t for the US export program declining. Soybean spreads were on the defensive all the way out to the new crop. Interior offers to sell cash meal have a defensive look while the meal export market stays tough. It should be noted that last Friday’s weekly meal exports were at a marketing year high. Meal spreads showed a bullish bias all the way out to the new crop.
Old crop soybeans – new highs for the move yet close lower. New crop soybeans – new highs for the move but fail to close in new high ground. Old crop soybean meal – challenges recent highs and closes $5.00 off of the day’s highs and less than $0.5 from the day’s lows. New crop soybean meal – makes new highs for the current rally and closes fractionally lower for the day. None of the aforementioned gives me any “warm & fuzzies” as to the current rally following through from a technical point of view. In addition – the rally in bean oil appears to be coming from left-handed support (the unwinding of inter-market spreads) – how good can that support be? Here’s the unfortunate part – daily market action has been predicated on Argentine forecasts and that will continue.
Daily Support & Resistance for 02/27
May Soybeans: $10.35 – $10.55
May Soybean Meal; $372.0 – $388.0
May Soybean Oil: $32.30 – $33.15
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.