Soybean Commentary
May Soybeans closed 7 ¼ cents lower ($10.37 ¾), July 7 ¾ cents lower ($10.48 ½) and Nov 2 ¼ cents lower ($10.44 ¾)
May Soybean Meal closed $1.1 lower ($392.1), July $1.5 lower ($393.8) and Dec $0.2 higher ($384.7)
May Soybean Oil closed 8 pts lower ($30.35), July 11 pts lower ($30.62) and Dec 8 pts lower ($31.45)
USDA announces 120.0 K T. new crop soybeans sold to Argentina
Weekly Soybean Export Inspections – 1.466 M T. vs. 1.000-1.800 M T. expected
US Soybeans Planted – 5% vs. 7% expected vs. 5% 5-year average
Nasty looking reversals were registered in old crop soybeans and old crop soybean meal. During Sunday night new highs were seen in all contracts of soybeans and soybean meal. The day session brought us a round of profit taking due to a short term (intra-day and inter-day) overbought scenario. Nothing has changed as to the rationale behind the bull market in meal. Argentina remains a mess; a short crop as well as problems getting the product shipped. Bean oil continues to stay depressed from processors crushing for meal as well as a punk palm oil market. Bean oil aficionados will tell you we good demand for US bean oil but not enough to compete with the meal market demand.
Not much change is being noted with the interior soybean basis vs. late last week. I don’t see much happening with the Gulf basis for soybeans; still easing from the strength we saw in first half April. Soybean deliveries against the May contract, 410 contracts, were probably a bit ore vs. what the trade was looking for. Spreads were pretty steady within the old crop while old crop was a noticeable loser to the new crop.
Given the suggestive looking reversals we saw in the soybean and soybean meal markets on Monday gives way to the thought we may be in for some backing and filling of the recent rally. I don’t think the rally is over but given the degree of overbought we saw early Monday with the shorter technical data some retracement/consolidation of the recent rally would not be out of the norm. Bean oil has gone quiet against recent lows. If the soybean and soybean meal markets do go into a correctional mode bean oil just may get some support from the unwinding of spreads involving short bean oil.
Daily Support & Resistance for 05/01
July Soybeans: $10.37 – $10.64
July Soybean Meal; $386.0 – $401.0
July Soybean Oil: ??? – $31.25
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