Soybean Commentary
March Soybeans close 12 ½ cents higher ($10.57 ½), July 12 ¼ cents higher ($10.76 ½) and Nov 5 ¾ cents higher ($10.38)
March Soybean Meal closes $0.2 lower ($394.0), July $2.0 higher ($394.1) and Dec $1.7 higher ($370.3)
March Soybean Oil closes 16 pts higher ($32.12), July 16 pts higher ($32.59) and Dec 13 pts higher ($33.01)
USDA announces 120.0 K T. of soybeans sold to China (60 K T. old crop, 60 K T. new crop) – 126.0 K T. of soybeans sold to Unknown (63 K T. old crop, 63 K T. new crop)
Weekly Soybean Export Sales – 857.8 K T. old crop vs. 400-700 K T. expected – 122.1 K T. new crop vs. 0-100 K T. expected
Weekly Soybean Meal Export Sales – 139.0 K T. old crop vs. 100-300 K T. expected – no new crop vs. none expected
Weekly Soybean Oil Export Sales – 16.6 K T. old crop vs. 10-40 K T. expected – no new crop vs. none expected
BAGE (Buenos Aries Grain Exchange) says Argentine soybean crop is 44.0 M T., down 3.0 M T. vs. last week’s estimate – USDA last month was 54.0 M T.
Argentine forecasts continue to show a dry bias for the heart of their soybean growing region. Weekly export sales come in better than expected. Corrections were seen in the Board Crush margins. BAGE once again lowers the Argentine crop size. Oil World suggests that if Argentina doesn’t see good rains in the next 10 days in their soybean regions their crop size could shrink to 40-43 M T. Other private entities are raising the Brazilian soybean crop but not to the point it is offsetting Argentine losses.
Interior cash soybeans give us a mixed look on Thursday. Processors are on the defensive due to recent cash movement. River locations are mixed depending upon the specific flooding issues at selected locations. The Gulf continues to look firm. Soybean spreads were mostly unchanged within the current year. Old crop continues to gain on new crop. Interior offers to sell cash meal appear to be moving lower while the export market stays firm. With the exception of the March contract (more deliveries vs. 1st day) bull spreads continue to work with the meal market’s price structure.
May meal appears ready to attack the $400 level once again after it failed the day before. There is nothing bearish about new highs and new high closes for both old crop and new crop soybeans. It looks like bean oil tested the support it created last week and that support is holding. As long as the trade has the perception that the Argentine is continuing to decline and the Brazilian crop is not increasing enough to offset the soybean complex will be biased to move higher. The latest forecasts for Argentina call for decent rains in the north, northwest and in the west – very little for the center south areas which are the primary soybean growing areas.
Daily Support & Resistance for 03/02
May Soybeans: $10.50 – $10.80 (?)
May Soybean Meal; $385.0 – $4.05 (?)
May Soybean Oil: $32.20 – $32.80
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