Soybean Commentary
May Soybeans closed 2 ¼ cents lower ($10.47 ¾), July 1 ½ cents lower ($10.58 ¾) and Nov 1 ½ cents lower ($10.46 ½)
May Soybean Meal closed $3.7 lower ($380.2), July $3.7 lower ($384.3) and Dec $1.9 lower ($376.9)
May Soybean Oil closed 32 pts lower ($31.53), July 32 pts lower ($31.81) and Dec 27 pts lower ($32.68)
USDA announces 120.0 K T. new crop soybeans sold to Argentina – 141.5 K T. new crop soybeans sold to Mexico
Weekly Soybean Export Sales – old crop vs. 900 K – 1.400 M T. expected – new crop vs. 400-600 K T. expected
Weekly Soybean Meal Export Sales – old crop 150-400 K T. vs. expected – new crop vs. 0-50 K T. expected
Weekly Soybean Oil Export Sales – old crop vs. 20-45 K T. expected – new crop vs. none expected
Despite soybeans finishing slightly lower a primary feature of the complex’s trade on Wednesday was crush trading; buying soybeans and selling products. This spread has been on a wild ride dating back to early February. In early February the May Board crush sat at $1.10 – on February 8th it traded in excess of $1.75 – on March 20th it challenged the $1.10 level – on April 6th it traded once again in excess of $1.75 – today it traded down to $1.35. This is all about the short crop in Argentina (world’s biggest exporter of soybean meal and soybean oil) and the possibility it will get the US additional product business. The USDA did raise the old crop crush on yesterday’s supply-demand report and people I believe to be in the know suggest the rate of crush could increase as we move through the balance of the marketing year. The inability of the soybean market to hold its attempt to rally stem from the big carryout in the US as well as Brazilian offers starting to come down – remember that they have a record crop and it is starting to hit the street.
River locations that feed to the Gulf are still showing a mixed basis levels. Where soybeans are needed basis is firm and where they aren’t basis is easier. Processors still show the best bids. The Gulf eases a touch but overall still a good basis. Soybean spreads show a steady to easier bias. Offers to sell cash meal in the interior are still looking for buyers while the meal export market still hangs tough. Meal spreads continue to ease as do bean oil spreads. I have to think the easier product spreads are in part to a strong crush rate; building product stockpiles in the near term.
The soybean price action advertises it wants to move into a corrective phase of the recent rally. $10.45 and then $10.30 are the suspected support levels for July soybeans. Resistance is still $10.75 to $10.90. Soybean meal has a similar look. July meal should try and realize support at the $380.0 level followed by something closer to $375.0. What about bean oil? It is still having a tough time sustaining a rally from the $31.50 level (July).
Daily Support & Resistance for 04/12
July Soybeans: $10.45 ($10.30) – $10.70
July Soybean Meal; $380.0 ($375.0) – $391.0
July Soybean Oil: $31.50 (?) – $32.20
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