Soybean Commentary
May Soybeans close 27 cents lower ($10.22 ½), July 26 ¾ cents lower ($10.33 ½) and Nov 18¼ cents lower ($10.22 ¾)
May Soybean Meal closes $14.3 lower ($358.6), July $13.3 lower ($361.3) and Dec $9.4 lower ($355.1)
May Soybean Oil closes 8 pts higher ($32.06), July 7 pts higher ($32.29) and Dec 5 pts higher ($32.86)
Weekly Soybean Export Inspections – 490.5 K T. vs. 700 k – 1.050 M T. expected
Weekend rain in Buenos Aries (not much in Cordoba) and forecasts calling for more) buried the meal market on Monday. This alone had the soybean market following suit. Soybean oil caught some left handed support from the liquidation of inter-market spreads involving short bean oil vs. long meal and soybeans. I’m also told the palm oil market has stabilized from its recent slide and was actually trying to rally. Many will say it’s too late to rescue the Argentine soybean crop but as far as I’m concerned it stops the bleeding. Adding to the sell-off was the CFTC Commitment of Traders report suggesting the spec was long 147.0 K soybean contracts as of March 13th. On Jan 16th this same report suggested the spec was short 136.6 K soybean contracts – a swing of 283.6 K contracts.
The interior soybean basis is showing signs of stabilizing and/or improvement as the sell-off in the flat price has shut down cash soybean movement. Locations that are showing the improvement are mostly along the riverways that feed to the Gulf. Processors are mostly steady as they are still digesting the movement they took in earlier this month when crush margins were running dramatically higher vs. what we are seeing today. As an example; in February 28th the May Board crush was $1.70, today it was trading around $1.16. Despite the poor weekly export inspections the Gulf appears to be stabilizing along with the river locations. Soybean spreads lost fractional ground within the crop year – the biggest losses came against the new crop. The interior meal basis continues to be on the defensive from the cash soybean movement we saw over the previous 2-3 weeks. The export market for meal continues under pressure as well. Soybean meal spreads ran soft within the crop year – noticeably losses vs. the new crop.
Interim confirming sell signals were elected in a big way today for soybean and soybean meal. The next decent looking level of support for May soybeans is down towards the $10.15 level followed by something closer to $10.00. The next decent looking support level for May soybean meal is a breakaway gap at $346.6. What about bean oil – Get May soybean oil above $33.00 with conviction on a closing basis we’ll talk about lows being in – not until then. Don’t be surprised to see some attempt at bouncing tonight in the bean and meal markets – short term inter-day charts are showing oversold.
Daily Support & Resistance for 03/20
May Soybeans: $10.10 ($10.00) – $10.36
May Soybean Meal; $353.0 ($348.0) – $367.5
May Soybean Oil: $31.60 – $32.60
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