Soybean Commentary
March Soybeans close 16 cents higher ($10.58 ¾), July 15¼ cents higher ($10.76 ¾) and Nov 8 ¾ cents higher ($10.28 ¼)
March Meal closes $5.3 higher ($341.2), July $4.8 higher ($347.6) and Dec $2.9 higher ($333.6)
March Bean Oil closes 39 pts higher ($34.69), July 35 pts higher ($35.21) and Dec 31 pts higher ($35.22)
Weekly Export Sales – Soybeans – old crop vs. 500-800 K T. expected; new crop vs. 100-250 K T. expected – Soybean Meal – old crop vs. 100-300 K T. expected; new crop vs. none expected – Soybean Oil – old crop vs. 5-20 K T. expected; new crop vs. none expected
New money appears to be taking the soybean complex higher and this is despite the idea that SA is developing a rather large crop. One has to remember that the funds follow price action not necessarily fundamentals and the price action is definitely impressive looking. The USDA will update US and World supply-demand tomorrow. Trade ideas have the US soybean carryout declining 10 million bu. while they have the World carryout declining 1.4 M T. The suggested decline in the world carryout is due to ideas that the Argentina crop will come in lower vs. last month. CONAB will be out in the morning with its latest update of Brazilian crop size. It is expected they will hike the estimate vs. last month. The question then becomes whether or not they hike it enough to offset the lower Argentine number. Last month CONAB suggested their soybean crop was 103.8 M T. My bottomline is that the flow of new $$$ is more than offsetting what appears to be less than bullish fundamentals.
Interior soybean basis levels are running unchanged to a shade better. Locations that are showing a better basis are river locations that feed into the export market. The gulf basis bears this out as it too is running a shade better. Soybean spreads ran steady to better on the day reflecting the new $$$ flowing into the market place. This held true for meal spreads as well despite offers to sell cash meal continuing to ratchet lower.
The technical price action continues to attract new longs into the soybean and soybean meal markets. Soybean oil continues to retrace higher following its mid to late January sell-off in the form of an upflag. On Friday there will be a Malaysian palm oil production report that as of this writing the trade is expecting to have a friendly bias. So here you have it – the technical price action looking strong while the fundamentals not so much.
Daily Support & Resistance for 02/09
March Beans: $10.43 – $10.72
March Meal; $336.0 – $346.0
March Bn Oil: $34.00 – $35.10
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.