Soybean Commentary
May Soybeans closed 13 ¼ cents higher ($10.47), July 12 ¾ cents higher ($10.57 ½) and Nov 10 cents higher ($10.43 ¼)
May Soybean Meal closed $3.3 higher ($389.6), July $3.6 higher ($393.7) and Dec $5.8 higher ($382.0)
May Soybean Oil closed 1 pt lower ($31.52), July 2 pts lower ($31.79) and Dec 4 pts higher ($32.57)
USDA announces 232.5 K T. old crop soybeans sold to unknown
Weekly Soybean Export Inspections – 373.9 K T. vs. 500-760 K T. expected
AgRural suggests Brazilian soybean crop at 119.0 M T. vs. previous at 117.9 vs. March USDA at 113.0
Trading the Board crush continues to be at the forefront of the complex’s daily activity. Weekly export inspections were feeble based on expectations yet bull spreads in the soybeans work. Bear spreads were working in the product markets. Attitudes are the US rate crush will stay strong as will US exports given the dramatic hike in Brazilian offers. It appears Brazil is trying to take advantage of the rift between China and the US. Tomorrow the USDA will update both US and World supply-demand. Expectations are that the US carryout will increase by 19 million bu. given the larger than expected Quarterly Stocks data. If there is a surprise here it will be the carryout will not increase as much due to continued decent US soybean exports and a strong rate of crush. World stocks are expected to decline by 1.45 M T. due to a lower Argentine crop vs. a higher Brazilian crop. If the USDA adopts some of the numbers that have been flying around we can expect to see the Brazilian soybean crop increase by 4-6 M T. and the Argentine crop decline by 6-8 M T.
Just about all of the interior soybean basis locations that I track continue to show strengthening basis levels. River locations that feed to the Gulf are showing the best increases. The Gulf is about 25-30 cents strong vs. one week ago. Bull spreads in beans were working all the way through the new crop. The interior meal basis remains soft looking while the Gulf basis for meal has a firm tone to it. Bear spreads were working in both product markets. Attitude is we are going to crush enough beans to meet any new demand that may come out way (Argentina).
Old crop soybean oil registers new lows for the down trend that has been intact dating back to November. The “however” is that it did not close in new low ground. The recent price action in both beans and meal continue to suggest they want to go higher. The ongoing problems between China and the US do create some tentativeness when pursing the rally. I have to think this type of nervous trading will continue until some signs of resolve are seen.
Daily Support & Resistance for 04/10
July Soybeans: $10.45 ($10.30) – $10.72 ($10.78)
July Soybean Meal; $384.0 – $401.0 (?)
July Soybean Oil: $31.60 – $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.