Soybean Commentary
March Soybeans close 4 ¾ cents lower ($10.54 ¼), July 4 cents lower ($10.73 ¾) and Nov 2 ¾ cents lower ($10.27 ¼)
March Meal closes $1.1 higher ($343.2), July $1.2 higher ($350.3) and Dec $0.6 higher ($336.2)
March Bean Oil closes 44 pts lower ($34.17), July 43 pts lower ($34.67) and Dec 37 pts lower ($34.64)
Weekly Soybean Export Inspections – 1.145 M T. vs. 1.100 – 1.300 M T. expected
Despite solid looking weekly soybean export inspections the soybean market appears to be caught between firm meal prices and soft bean oil prices. Meal prices have been firm in response to good export sales and shipments while bean oil succumbs to soft palm oil prices. Brazilian soybean harvest continues to move along – currently 18% done vs. 15% last year vs. 10% 5-year average. The top producing state of Mato Grosso reports 45% done vs. 27% last year and 19% for the 5-year average. The # 2 producing state of Parana is lagging – 10% done vs. 31% last year and 17% for its 5-year average.
The trend in the interior soybean basis dating back to the 1st of the month shows a firmer bias. This holds true for Gulf values as well. Despite the stronger trend in basis values soybean spreads within the crop year are softer. This suggests Brazilian origin is coming into the world export circles and this will eventually displace US origin. Offers to sell cash soybean meal continue to be some of the cheapest looking going back many years. Meal spreads, too, are grinding south. Nearby Board crush margins recently traded as low as 70 cents but are now trying to bounce back.
For the past 4 days March beans have been realizing resistance at the $10.60 level give or take 1-2 cents. March meal traded to new highs on Monday for the current rally. Back in mid-January March meal created some decent looking resistance at the $345.0-$346.0 level; today march meal traded to $345.5. Over the past 1 ½ weeks March bean oil has been upflagging to resistance, $35.00 (this level was challenged last Thursday, Friday). After today’s price action this upflagging effort appears to rolling over. To make a long story short – the recent attempts by the complex to rally now appears to be running out of steam.
Daily Support & Resistance for 02/14
March Beans: $10.45 – $10.60
March Meal; $340.0 – $346.0
March Bn Oil: $33.75 – $34.70
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