Soybean Commentary
March Soybeans close 2 ½ cents lower ($10.11), July 2 ¼ cents lower ($10.31) and Nov ¾ cents lower ($10.06 ¼)
March Meal closes $0.2 lower ($331.1), July unchanged ($338.8) and Dec $0.1 higher ($331.9)
March Bean Oil closes 4 pts lower ($32.35), July 2 pts lower ($32.91) and Dec unchanged ($33.33)
Weekly Soybean Export Inspections – 704.9 K T. vs. 750 K – 1.000 M T. expected
Soybeans make new lows for the current sell-off but do not close in new low ground for the current sell-off. Soybean meal does not make new lows for the current sell-off and closes only fractionally lower to steady on the day. Soybean oil, like soybeans, makes new lows for the current sell-off but does not close in new low ground for the current sell-off. Why do I make these points – the price action, in my opinion, is trying to say we’ve gone low enough for the time being. We’ve got lots of bearish news out there (a very large SA crop coming on and waning demand for US origin) yet the market almost acts like it has run out of sellers at least for now. Weekly export inspections were slightly below guesstimates but given the only modestly lower closes it was not much of an issue.
Most interior cash soybean markets are running steady to easier. I don’t think its producer movement but rather declining export demand. Processors appear to be standing in as board crush margins continue to honor 70 cents. The Gulf market continues to grind easier reflecting the easing export demand. Soybeans spreads within the current crop year continue to run steady to soft and old crop continues to lose to new crop. The old crop losses to new crop are all about liquidation. 1st notice day is tomorrow – current registrations are 296 (as of Friday afternoon). The cash soybean meal market in the interior is no worse than steady but still pretty ugly looking. Bids for export meal are actually showing signs of some improvement. Meal spreads, however, continue to inch wider. Soybean meal registrations, as of last Friday, were 253.
Last week I mentioned that when July beans moved below $10.30 they were moving into a previously established congestive support area. That level is still providing support. Last Friday July soybean meal lightly tapped into some sell stop territory but support was found at previous highs (the mid-$330.0’s) – that support is still holding. 1 ½ weeks ago I thought July soybean oil was targeting $32.50 – we came within 12 pts of that level on Monday. Deliveries, or absence thereof, could dictate whether or not the complex continues to hold. Bean oil charts are flirting with oversold, soybeans and soybean meal are not yet quite there. I think we are still supposed to be selling rallies in beans and meal but I’ll emphasize “rallies”. I don’t think one needs to be short bean oil at current levels.
Daily Support & Resistance for 02/28
July Beans: $10.25 – $10.40 ($10.45)
July Meal; $335.0 (?) – $344.0
July Bn Oil: $32.50 – $33.40
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