Soybean Commentary
March Soybeans close 12 cents lower ($10.14 ¾), July 11 ¼ cents lower ($10.34 ¾) and Nov 8 ¼ cents lower ($10.13 ½)
March Meal closes $2.3 lower ($326.9), July $2.4 lower ($334.3) and Dec $1.9 lower ($327.9)
March Bean Oil closes 55 pts lower ($33.47), July 54 pts lower ($34.00) and Dec 47 pts lower ($34.38)
Not much has changed from Monday to Tuesday other than private analysts hiking the Brazilian soybean crop. It seems more and more estimates of 108.0-109.0 M T. are coming out. The last estimate from CONAB was 105.6 M T. and the USDA was at 104.0 M T. CONAB will be out early Thursday morning with their latest ideas and the USDA will follow later that morning with updated Supply-Demand data. Little change it expected for the US soybean carryout and the World carryout is expected to increase by 1.14 M T. Over the past few weeks we have been hearing about outbreaks of bird flu in Asia and parts of Europe. At the time not much attention was paid to it. Now over the past few days two out breaks of bird flu have been found in this country. It now seems this is getting some attention. Despite this bean oil continues to get the short end of the stick vs. the soybean meal market. Soybean meal is grinding out new lows for the current downside move while the soybean market continues to honor last week’s lows. The “chatter’ continues to talk about more big rain events (possible flooding) for selected areas of Brazil (RGDS) and selected areas of Argentina. This fell on deaf ears Tuesday.
The interior soybean basis is mostly steady – river bids appear a bit easier with the exception of Davenport, IA as it is noticeably higher (their corn bid is too). I’m guessing Davenport is re-opening for the spring. The Gulf basis has a frim bias as bids are rising while offers stay unchanged. Soybean spreads stay under pressure all the way out to the new crop. The same holds true for meal spreads as offers to sell cash soybean meal remain historically low. I will offer I saw the first bump up in rail meal offers in quite some time. Truck offers still look soft.
The meal market continues to leak lower. Bean oil saw a half back move of last week’s rally. Soybeans look like they are ready to do some additional probing of the congestive type of support ($10.10 to $10.30) that was established last week of December to first week of January. If Brazil is going to be as big as some are alluding to and US acres for the coming season are going to be as big as some are alluding to I can’t imagine July beans not testing the $10.00 mark if not lower. I know we’ve got enough spec longs in the market that their liquidation could provide us with this kind of break.
Daily Support & Resistance for 03/08
July Beans: $10.25 (?) – $10.45
July Meal; $330.0 – $337.0
July Bn Oil: $33.60 – $34.60
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