Soybean Commentary
May Soybeans close ¼ cent lower ($9.41 ¾), July unchanged ($9.53 ¼) and Nov ¼ cent higher ($9.49 ¾)
May Meal closes $1.7 higher ($309.1), July $1.8 higher ($313.2) and Dec $1.3 higher ($312.2)
May Bean Oil closes 27 pts lower ($31.35), July 26 pts lower ($31.62) and Dec 27 pts lower ($32.06)
Weekly Soybean Export Inspections – 832.9 K T. vs. 450-650 K T. expected
Flat price soybeans continued to be mired against recent lows. Soybean meal was the positive of the product markets while bean oil was the negative. Soybean meal was catching some support from the idea of recent excessive moisture in the near harvest ready areas of Argentina (this remains to be quantified). Bean oil was following the palm oil as palm oil moved down to 6 month lows. Tomorrow Conab will update the size of the Brazilian soybean crop – most are expecting a number around 111.0 M T.; an increase of 3.0 M T. In addition to the Brazilian update the USDA will update the US old crop carryout and the World old crop carryout – both of these numbers are expected to increase.
The interior soybean basis has a mixed look to it. The processor basis is maintaining recent strength given Board crush margins in the mid-low 80’s. The Ohio River reads firmer, the Illinois River is mixed (some locations a bit better, others a bit easier) and the mid-Miss a bit better. The Gulf market remains slack looking. Soybean spreads were fractionally softer all the way out to the new crop (index fund rolling?). Offers to sell cash meal remain depressed looking despite the idea of some processor downtime over the near term. Meal spreads were soft into August while old crop was minor gainer on the new crop.
The long term technical look at soybeans is a major downtrend featuring shades of oversold. The shorter term look is sideways against the recent lows. The meal market and the bean oil market have similar looks. We know we have big numbers (supply) out there and for the near term very few, if any, threats against that supply. As much as I would like to say the complex is oversold the price action continues to leave a lot to be desired. I learned a long time ago that our markets will go higher than we feel reasonable as well as going lower than we feel reasonable.
Daily Support & Resistance for 04/11
July Beans: $9.40 – $9.63 ($9.68)
July Meal; $309.0 (?) – $318.0
July Bn Oil: $31.75 – $32.40 (32.70)
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