Soybean Commentary
March Soybeans close 8 ¼ cents lower ($10.50 ½), July 7 ¼ cents lower ($10.69 ½) and Nov 2 ¼ cents lower ($10.26)
March Meal closes $2.8 lower ($338.4), July $2.5 lower ($345.1) and Dec $0.4 lower ($333.2)
March Bean Oil closes 2 pts lower ($34.67), July 5 pts lower ($34.95) and Dec 11 pts lower ($35.11)
Weekly Export Sales – Soybeans – 536.3 K T. old crop vs. 500-800 K T. expected; 129.3 K T. new crop vs. 100-250 K T. expected – Soybean Meal – 347.7 K T. old crop vs. 100-300 K T. expected; 1.0 K T. new crop vs. none expected – Soybean Oil – 35.3 K T. old crop vs. 5-20 K T. expected; no new crop vs. none expected
USDA announces 107 K T. old crop soybeans sold to unknown
CONAB suggests the Brazilian soybean crop is 105.6 M T. vs. 103.8 M T. last month vs. USDA at 104.0 M T.
Highlights of the USDA Soybean Supply-Demand Report – US – left all demand data unchanged; carryout stays unchanged – World – reduced carryout 1.94 M T. most in part to Argentina crop size coming down 1.5 M T.
When the trade is trying to be bullish beans and meal (rallying into this report) and the USDA leaves demand data unchanged (more times than not) the reaction is with lower prices. Adding to the inability to follow through was the higher Brazilian crop size suggestion from CONAB (the USDA failed to pick up) and the higher estimate from BAGE (54.8 M T. vs. 53.5 M T. last week). The bottomline appears that the trade has gotten a bit too long for now. Bean oil received some left-handed support from inter-market spreading as well as the notion that the Malaysian palm oil report (due out early tomorrow morning) will have a friendly bias. If the balance of the SA growing season goes on without a hitch soy complex prices should work lower.
Despite seeing higher prices over the last week and a half river basis levels for soybeans continue to edge higher. In spite of this the nearby soybean spreads registered new lows. The old crop/new crop spreads retreated from their recent 15 cent rally. Offers to sell cash meal continue to be in the dumper. Meal spreads, like soybeans spreads, continue to show a widening bias.
Minor interim reversals were seen throughout the soy complex on Thursday. This should attract some short term liquidation. The next item of focus will be the USDA AG Outlook Forum scheduled for Feb 23rd & 24th. Unlike corn the trade will be anxious to see what kind of soy acreage increases they tout for the coming season.
Daily Support & Resistance for 02/10
March Beans: $10.40 – $10.56
March Meal; $333.0 – $340.0
March Bn Oil: $34.05 – $35.10
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