Soybean Commentary
March Soybeans close 1 ¾ cents higher ($10.24 ½), July 1 ½ cents higher ($10.42) and Nov 3 cents lower ($10.01)
March Meal closes $0.2 higher ($334.6), July $0.6 higher ($340.1) and Dec $1.9 lower ($327.7)
March Bean Oil closes 24 pts higher ($33.85), July 24 pts higher ($34.40) and Dec 21 pts higher ($34.30)
Minor bottom picking from ideas that Monday’s break was overdone vs. continued long liquidation pretty much sums up Tuesday’s trade in the soybean and soybean meal markets. Bean oil catches a better bid from the unwinding of recent long meal/short bean oil spreads and this occurred despite lower palm oil prices. The noticeably lower US dollar aided in bean oil’s bid. The weather/forecasts in SA continue to be non-threatening.
Interior river locations involved with export show a better basis on Tuesday. As in corn producer selling has come to a screeching halt. Again like corn the Gulf basis for soybeans was a bit easier on Tuesday vs. Monday but still in the same price range it has been in for the past week or so. Soybean spreads within the crop year saw some minor correction from their recent easing. Old crop gained on new crop which I think was just a reaction to their recent sharp sell-off. Offers to sell cash soybean meal continue to be in the dumper. Meal spreads were softer within the crop year while old crop did gain on the new crop. Within the next couple of months focus will turn to evaluating old crop stocks vs. the idea of high new crop acres.
If Tuesday’s minor gains vs. recent losses are any indication of what we have to look forward to in the next number of weeks I have to think we are looking at yet lower prices. I still see initial support for March beans at the $10.15-$10.10 level. Resistance should be in the mid to high $10.30’s. March meal continues to show a smattering of support at $331.0-$329.0; better down towards $320.0. bean oil’s inside day of Tuesday’s break just signals an attempt at some consolidation. It does not suggest a turnaround. The bottom line – the price action still suggests we are supposed to be selling rallies especially if SA weather stays non-threatening.
Daily Support & Resistance for 02/01
March Beans: $10.15 – $10.35
March Meal; $331.0 ($328.0) – $339.0
March Bn Oil: $33.30 – $34.40
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