Soybean Commentary
May Soybeans closed 25 cents lower ($10.02 ¼), July 25¼ cents lower ($10.11 ½) and Nov 19 ¼ cents lower ($10.18)
May Soybean Meal closed $9.6 lower ($384.8), July $11.2 lower ($382.5) and Dec $7.0 lower ($375.0)
May Soybean Oil closed 11 pts higher ($30.67), July 10 pts higher ($30.87) and Dec 9 pts higher ($31.61)
Weekly Soybean Export Inspections – 533.6 K T. vs. 380-650 K T. expected
Soybean Planting Progress – 15% planted vs. 14% expected vs. 13% 5-year average
The lack of resolution to the Chinese-US trade rift has the soybean trade down sharply on Monday. The soybean meal/soybean oil spread reacts sharply to the latest COT report suggesting record long specs in meal vs. record short specs in bean oil. The end result of this was meal prices down sharply while bean oil prices were up modestly. Adding to the bean oil gains were reports that palm oil had its best day (higher prices) in the last 4 months. Weekly soybean export inspections were deemed solid but not enough to stem the slide. Versus my own opinion the trade is looking for some bearish looking data on Thursday’s USDA Supply-Demand outlook (see attached table of estimates).
Most interior cash soybean markets are running steady vs. what we saw late last week. The Gulf appears steady as of this writing. Soybean spreads within old crop ran mostly steady on the day while old crop/new crop spreads (July/Nov) moved into new contract low ground. Offers to sell cash meal in the interior, truck offers in particular eased on Monday. Rail offers ran steady as did offers at the Gulf. Gulf offers appear to be sustaining last week’s strength. Meal spreads were under the gun July forward responding to the upfront selling. As much as the trade had been expecting better meal business it has yet to appear.
Old crop soybeans register their lowest close dating back to early February. The “triangle” formation that I had been mentioning last week has completely broken down in the old crop. The new crop doesn’t look quite as ugly but it has suggested we have a top ($10.60) in place. Old crop soybean meal (July) has not broken down as it appears we still have some pretty decent looking support from the $380 to $375 level. If meal is going to continue to be the deal this suggested support area should hold. Over the last few days bean oil has received some left handed support from the unwinding of long meal/short oil spreads. The flat price action in bean oil has the appearance of an upflag. This is not my favorite formation to tout when trying to say the market has made a low. In other words I don’t trust the rally. Over the last 4 days we have seen meal correct $20 plus yet bean oil has only rallied 80 pts; meal down $2000 plus and bean oil only up $480. For what it is worth both old crop beans and meal went home on Monday in a near extreme oversold state on short term data.
Daily Support & Resistance for 05/08
July Soybeans: $10.05 – $10.20
July Soybean Meal; $380.0 – $388.0
July Soybean Oil: $30.40 – $31.20
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