Soybean Commentary
March Soybeans close 17 ½ cents lower ($10.43 ¾), July 16 ½ cents lower ($10.63 ¼) and Nov 10 ¼ cents lower ($10.24)
March Meal closes $4.9 lower ($342.0), July $4.6 lower ($349.1) and Dec $3.1 lower ($336.9)
March Bean Oil closes 42 pts lower ($33.52), July 41 pts lower ($34.05) and Dec 28 pts lower ($34.34)
Weekly Export Sales – Soybeans – 890.0 K T. old crop vs. 500-750 K T. expected; 207.4 K T. new crop vs. 50-150 K T. expected – Soybean Meal – 121.3 K T. old crop vs. 150-350 K T. expected; no new crop vs. none expected – Soybean Oil – 9.9 K T. old crop vs. 8-30 K T. expected; no new crop vs. none expected
Old crop beans give back all of Wednesday’s gains and then some. Soybean meal gives back a little bit more than half of Wednesday’s gains and bean oil continues to grind lower. Weekly soybean export sales came in better vs. expectations while meal sales came in less than expected. After being slightly easier in the night session the meal market ran to new highs for the current rally shortly after the re-opening. Soybeans could only make new highs by 1 cent or so over above recent highs. Bean oil pretty much dogged it for the entire session. Excessive moisture remains in the near term forecasts for selected areas of Argentina. I think the key here is the word “selected”. So what was out there that prompted the break – in the case of soybeans the amount of new longs in recent days without any noticeable price improvement and in the case of soybean meal too many new longs in too short a period of time (plus a cash market that doesn’t justify the current rally).
Interior river basis locations show an improving soybean basis. Processors continue to stand in while locations elsewhere in the interior show steady to soft basis levels. The Gulf for beans is maintaining its recent firm tone. Bean spreads were softer on the day within the old crop; old crop was a noticeable lower to new crop. Offers to sell cash soybean meal continue to look ugly – meal spreads continue to show a soft look within old crop. I hear a lot of chatter out there about the US producer not having many cash beans left to sell. I hear those beans have moved into commercial hands; deliverable stocks are growing. First notice day is one week from next Tuesday. The amount of deliveries we see will be very interesting. If they’re light it suggests the US export campaign is lasting longer than originally thought. If they are heavy it suggests the US export campaign is well supplied for the duration and whatever is delivered is not needed.
Similar to what I saw last Monday the soybean market acts tired as it is unable to take out its recent highs. The meal market makes new highs but closes lower in almost dramatic fashion. So here we have minor interim reversals but we have a 3-day weekend coming up and over that 3- day weekend a possible weather play. With said I doubt we’ll see any major downside follow through on Friday. The make-up of the forecasted rain event in Argentina over the weekend will dictate the Monday night trade. Yes, the grain markets are closed Monday for the US President’s Day holiday.
Daily Support & Resistance for 02/17
March Beans: $10.53 – $10.74
March Meal; $342.5 – $351.5
March Bn Oil: $33.60 – $34.40
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