Soybean Commentary
May Soybeans closed 10 ½ cents higher ($10.43 ¼), July 10 ¼ cents higher ($10.53 ¼) and Nov 8 ¾ cents higher ($10.49 ½)
May Soybean Meal closed $1.6 lower ($398.4), July $2.1 higher ($398.6) and Dec $1.9 lower ($386.7)
May Soybean Oil closed 21 pts higher ($30.58), July 21 pts higher ($30.81) and Dec 24 pts higher ($31.57)
Weekly Soybean Export Sales – 416.3 K T. old crop 300-600 K T. expected – 469.9 K T. new crop vs. 150-350 K T. expected
Weekly Soybean Meal Export Sales – 246.0 K T. old crop vs. 150-350 K T. expected – 61.2 K T. new crop vs. none expected
Weekly Soybean Oil Export Sales – 44.5 K T. old crop vs. 8-25 K T. expected – no new crop vs. none expected
USDA announces 30.0 K T. old crop soybean oil sold to Peru
Board crush margins go into a correction phase after the recent 45 cent rally was deemed overdone. Also featured was some moderate unwinding of meal/oil spreads. Initially soybeans were down along with the meal market but rallied late on optimism that China and the US will come to an agreement over their tariff disputes. Underlying support continues to come out of Argentina as it continues to be a real mess down there. They continue to deal with a short crop, labor issues at selected crushing facilities, port problems (loading) and now excessive moisture during the latter stages of their soybean harvest. Soybean Oil is trying to rally out of the current hole; we saw good looking weekly export sales for bean oil and a 30.0 K T. daily announced sale to Peru. I don’t think bean oil is going to be the new leader in the clubhouse but a 100 pt rally from current levels should not be considered a big deal. Bean oil has been a well pronounced downtrend dating back to November.
The interior soybean basis is relatively quiet. The processor has the best bid out there as he tries to capitalize on the strong crush margins. Soybean spreads within the current crop ran mostly steady. Old crop tries to regain some leadership on the new crop after the recent down wave. Even to 5 cents under should be deemed as decent looking support for the July/Nov spread. Offers to sell cash meal via rail finally showed some decent advertised improvement. This follows the export market’s strength from earlier this week. Meal spreads, July forward, saw a very slight bearish bias on Thursday; I’ll call it a minor correction of the recent rally.
Old crop soybeans continue to be in a broad triangular formation. New crop beans appear ready to challenge the pseudo looking triple top against the $10.60 level. Old crop meal appears to be entering a minor corrective phase as does the new crop. Given what is going on in Argentine I can’t but think the meal market is not going away anytime soon. Soybean oil is trying to rally out of the hole. Am I asking too much for July bean oil to trade up to the $31.50 – $32.00 level?
Daily Support & Resistance for 05/04
July Soybeans: $10.42 – $10.66
July Soybean Meal; $394.0 – $406.0
July Soybean Oil: $30.55 – $31.20
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