Soybean Commentary
March Soybeans close 1 ¼ cents lower ($10.53 3/4), July 1 cent lower ($10.73) and Nov ½ cent higher ($10.45)
March Soybean Meal closes $0.4 higher ($380.6), July $0.3 lower ($384.5) and Dec $0.4 lower ($371.5)
March Soybean Oil closes 26 pts lower ($31.67), July 25 pts lower ($32.06) and Dec 24 pts lower ($32.53)
Weekly Soybean Export Sales – old crop vs. 900 K – 1.400 M T. expected – new crop vs. 100-300 K T. expected
Weekly Soybean Meal Export Sales – old crop vs. 100-350 K T. expected – new crop vs. none expected
Weekly Soybean Oil Export Sales – old crop 10-40 K T. expected – new crop vs. none expected
CONAB – Brazilian soybean crop; 113.02 M T. vs. 111.55 last month
Highlights of USDA Supply-Demand – US –Increases carryout by 25 million bu. (lowers export by 35 million bu., increases crush by 10 million bu.) – World – increases carryin by 510 K T., lowers carryout by 3.74 M T. (the big feature was lowering Argentina’s production by 7.0 M T.)
BAGE (Buenos Aires Grain Exchange) suggests the Argentine soybean crop is 42.0 M T. vs. previous estimate of 44.0 M T. vs. USDA at 47.0 M T.
It’s hard to get anything going on the upside when the US projected soybean carryout is 555 million bu. Overall, though, it was not a bad performance. I have to think the still shrinking Argentine crop continues to lend support. My question is that if the Argentine soybean crop is down another 5.0 M T. vs. wheat the USDA had to say who is going to pick up the slack meaning lower exports out of Argentina. The hike in the Brazilian crop is nowhere near offsetting the Argentine crop losses. Is China going to cut back on their imports? According to the USDA they are not. Was today’s noticeably larger than expected weekly export sales just a one-time deal? If the crop losses continue in SA I have to think not.
The interior soybean basis continues to show a defensive tone with only one exception, Toledo. The Gulf looks steady with a very slight higher bias. Soybean spreads ran flat within the current crop year while old crop continues to lose to the new crop. Interior offers to sell meal suggest more than ample quantity. The Gulf, however, is looking at higher offers. What changes meal spreads saw were just fractional.
Today’s early sell-off in the soybean market found support at the topside of early last week’s consolidation effort (before the highs of the week were made). The meal price action looks similar as it did find support at some previously established consolidation (2 weeks ago). Bean oil, however, struggles to find any support as it appears to be in line to test the season’s lows made in mid-February. For what it is worth the latest Argentine forecasts do suggest some moisture may occur on the fringe of the primary soybean growing areas this weekend and again early mid next week. Some forecasters are trying to suggest there may be some major pattern changes 2 weeks out. With the threat of moisture around in the near term (it’s not too late to stop the bleeding) I would expect to see a defensive type trade on Friday.
Daily Support & Resistance for 03/09
May Soybeans: $10.50 – $10.73
May Soybean Meal; $377.5 – $389.0
May Soybean Oil: $31.50 (?) – $32.20
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.