Soybean Commentary
March Soybeans close 11 ¼ cents lower ($10.11 ½), July 11 ½ cents lower ($10.31 ½) and Nov 9 cents lower ($10.04 ½)
March Meal closes $4.2 lower ($330.8), July $4.5 lower ($338.4) and Dec $2.4 lower ($331.4)
March Bean Oil closes 40 pts lower ($32.32), July 40 pts lower ($32.87) and Dec 37 pts lower ($33.33)
USDA Ag Outlook Forum suggests the 2017 soybean acreage will be 88.0 million acres v. 83.4 million last year
Weekly Export Sales – Soybeans – old crop vs. 550-850 K T. expected; new crop vs. 100-300 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
The soy complex continues to move lower. The USDA Ag Outlook Forum suggesting this coming year’s soybean planted acres at 88.0 million is not friendly. Reports of the Brazil soybean crop growing to 107.8 M T. are not friendly. The seasonal decline in US soybean exports is not friendly. With all of this said the rationale for owning soybeans is waning rapidly. I continue to hear of selected forecasts calling for excessive moisture in the some of the harvest ready areas of Brazil but so far that is falling on deaf ears. If one goes back and looks at all of the rallies we had this season many of them were attached to ideas of too much moisture – so far the old adage of “rain makes grain” is holding true. Given what the USDA had to say about planted acres this morning I can’t think their outlook on supply-demand will offer much hope to the wannabe bulls. So here you have it – building supply vs. not enough demand to offset.
The interior soybean basis is showing steady to weaker on Thursday. River locations are showing the easiness while other locations are running steady. River locations are responding to easing Gulf values. Spreads ran steady to easier within the old crop. Old crop lost to new crop despite the idea of much larger new crop acres. This scenario is reflective of the overall liquidation phase.
Soybeans are now off 50 cents from the high seen last Thursday. Soybean meal is now off $20 from its high from last Thursday taking its cue from the strong reversal that occurred that day. Soybean oil has been sinking for the past two weeks taking its cue from failing palm prices. For as ugly as the bean action has been the past couple of days it is coming into some technical support. Soybean meal, however, is about $2-$3 away from some sell stop activity. Soybean oil is beginning to flirt with some oversold. Short term technical observations suggest caution selling the current break in beans and bean oil – how about some inter-market spreading; buying bean oil and beans while selling bean meal against them.
Daily Support & Resistance for 02/24
July Beans: $10.22 – $10.40
July Meal; $335.5 (?) – $342.5
July Bn Oil: $32.50 – $33.40
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