Soybean Commentary
May Soybeans closed 4 ¾ cents higher ($10.42 ½), July 4 ¾ cents higher ($10.53 ¼) and Nov 5 ¾ cents higher ($10.50 ½)
May Soybean Meal closed $10.9 higher ($403.0), July $10.6 higher ($404.4) and Dec $7.0 higher ($391.7)
May Soybean Oil closed 27 pts lower ($30.08), July 29 pts lower ($30.33) and Dec 39 pts lower ($31.06)
So much for Monday’s suggested reversals in beans and meal. The new month brings new buyers to the meal market. July Board crush margins registered new highs for the year. The mess in Argentina continues and that in turn has meal traders thinking more business for the US. It has to be noted that the US meal bid for export jumped noticeably today. Soybeans continue to be caught between sagging bean oil prices and surging meal prices. Bean oil continues to suffer from the idea that processors are crushing for meal and that in turn creates more bean oil stocks. Bean oil bulls will tell you that bean oil usage is great but as long as the “meal is the deal” spreaders will sell bean oil against their meal purchases. Underlying support for soybeans comes not only from meal demand but also from hopes for a favorable outcome when US trade representatives meet in Beijing later this week to iron out the recent tariff spats.
The interior soybean basis is in the process of rolling from may to July. I’m seeing locations roll from a 10 cent spread to as tight as a 1 cent spread. Not much happens with the Gulf soybean market. Spreads within old crop ran steady while old crop/new crop continue to show a defensive posture. The interior meal basis is quiet. The big deal in the cash meal market is the export market; noticeable increases. Bull spreads in meal worked all the way out to the new crop.
New highs, new high closes says it all for the soybean meal market. The price action in old crop soybeans features a major triangulation formation. If the meal market continues to move higher I have to think the soybean market will come out of the current formation to the topside. How long bean oil stays depressed remains to be seen. I couldn’t stand it any longer so I bought some today. Daily RSI indicators only show a minor degree of oversold for bean oil, 27.4. Most momentum indicators, daily and inter-day show a better degree of oversold.
Daily Support & Resistance for 05/02
July Soybeans: $10.45 – $10.66
July Soybean Meal; $395.0 – ???
July Soybean Oil: ??? – $30.80 ($31.00)
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