Soybean Commentary
May Soybeans close 5 ¾ cents higher ($10.28 ¼), July 5 ½ cents higher ($10.39) and Nov 2¼ cents higher ($10.25)
May Soybean Meal closes $3.1 higher ($361.7), July $2.9 lower ($364.2) and Dec $2.7 lower ($357.8)
May Soybean Oil closes 32 pts lower ($31.74), July 32 pts lower ($31.97) and Dec 31 pts lower ($32.55)
Soybeans and soybean meal give us a minor bounce on Tuesday following Monday’s beating. The trade continues to assess the Argentine situation – did the recent rains stop the bleeding or did they actually add a few bushels back to production. I think most are with the idea the bleeding has stopped; doubtful of adding bushels back to production. This conversation will go back and forth. On Thursday we should receive updates from the various reporting agencies, BAGE, Rosario. Later this week, early next week, estimates will start flying around as to the USDA Quarterly Stocks and Prospective Planting schedule for release on the 29th. As of this writing I have to think the trade will be looking for big stocks as well as additional acres (vs. what the USDA laid out for us at their February Outlook meeting).
Interior soybean basis levels, processors, are quiet. River basis levels, however, continue to whirl around. On Friday it looked like the Gulf basis was trying to stabilize from recent weakness – Monday’s late posting said NOT. Soybean spreads within current crop year ran steady to fractionally better while old crop was able to get back some of what it lost vs. the new crop. The interior meal basis (truck) continues to be slack looking. The rail basis for meal is still heading lower. The Gulf basis for meal is steady but soft looking. Meal spreads gained back fractionally what it lost on Monday. Today’s bounce in the spreads for both beans and meal had a “dead cat” look to them.
If meal and soybean prices are trying to advertise they are rejecting the recent low levels today’s trade sure lacked a lot of enthusiasm. Bean oil takes it on the chin as traders took advantage of the sharp drop in the meal/oil spreads (oversold). We may see some additional backing and filling over the near term (soybeans and soybean meal) but overall I’m thinking the flat price goes into a consolidation mode for the next number of days. AS far as bean oil is concerned it seems like the only time it rallies is when meal is going down – not a great scenario for higher prices. Closes above $32.50 in May bean oil may provide a spark as it would take out a down trendline that has been in place dating early mid- November.
Daily Support & Resistance for 03/21
May Soybeans: $10.15 – $10.39
May Soybean Meal; $353.0 – $367.5
May Soybean Oil: $31.40 (?) – $32.35
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