Soybean Commentary
May Soybeans closed 3 cents higher ($10.50), July 2 ¾ cents higher ($10.60 ¼) and Nov 4 ¾ cents higher ($10.48)
May Soybean Meal closed $5.7 lower ($383.9), July $5.7 lower ($388.0) and Dec $3.2 lower ($378.8)
May Soybean Oil closed 33 pts higher ($31.85), July 34 pts higher ($32.13) and Dec 38 pts higher ($32.95)
USDA announces 279.0 K T. old crop soybeans sold to unknown – 120.0 K T. new crop soybeans sold to Argentina – 132.0 K T. new crop soybeans sold to China
CONAB – Brazilian Soybean Production – 114.96 M T. vs. 113.02 M T. last month
Highlights of the USDA Supply-Demand Report – US – increased crush 10 million bu. – cut seed by 3 million bu. – cut residual 3 million bu. – lowered carryout 5 million bu. – World – cut Global production by 6.05 M T. (Argentina down 7.0 M T., Brazil up 2.0 M T.) – cut total usage 1.75 M T. – lowered carryout 3.6 M T.
Positive/reassuring statements from the President of China regarding keeping trade open with the US allowed soybeans to make new highs for the current rally. Unfortunately the rally did not hold as the meal market gave way. The USDA report was initially deemed as friendly as carryout data came in lower than expected for both the US and the World. Once again the rally failed to hold. I can give you a couple of “just my opinion” explanations – have you ever seen a sustained bull market with a 550 million bu. carryout projection – the US processor is currently crushing for meal thinking better business may be near at hand but at the same time creating a bit of a meal glut. I would like to think we have tabled the Chinese/US trade rift for the near term but given the volatile nature of US leaders one never knows. My bottomline – the price action in both beans and meal is acting tired.
The interior soybean basis has gone mixed on the riverways that feed to the Gulf. Processors continue to stand in. The Gulf continues to advertise it needs soybeans. Spreads within the current crop year show fractional improvement while the old crop loses noticeably to the new crop. Interior offers to sell cash meal continue to look for buyers. Export meal rolls to a July basis and it looks stronger. Meal spreads, however, show a bearish bias all the way out through the new crop.
Despite the noticeably larger carryout for bean oil it catches a bid from the unwinding of long meal/short oil spreads. New crop soybeans catch a bid from the unwinding of old crop/new crop spreads. The flat price action in both old crop meal and soybeans acts tired. We have thrown some positive news at the market in the form of steady export announcements as well as a lower than anticipated carryout yet the rallies fail to follow through. It looks like we’re in for some support testing for the bean and meal markets.
Daily Support & Resistance for 04/11
July Soybeans: $10.45 ($10.30) – $10.70
July Soybean Meal; $382.0 ($379.0) – $3.94.0
July Soybean Oil: $31.80 – $32.50
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.