Soybean Commentary
May Soybeans close 2 ½ cents lower ($9.39 ¼), July 2 ½ cents lower ($9.50 ¾) and Nov 1 ¼ cents lower ($9.48 ½)
May Meal closes $0.2 higher ($309.3), July $0.3 higher ($313.5) and Dec $0.4 higher ($312.6)
May Bean Oil closes 28 pts lower ($31.07), July 31 pts lower ($31.31) and Dec 24 pts lower ($31.82)
Highlights of the USDA Supply-Demand report – US – increased carryout by 10 million bu. by raising seed usage 9 million bu. while lowering residual by 19 million bu. – World – increased carryout by 4.59 M T.
What the USDA had to say about the US carryout was deemed neutral based on trader expectations. What the USDA had to say about the World carryout was higher than any trader expectations and that had old crop beans trading down to the level that acted as a spring board to last year’s spring rally. Shortly thereafter it seemed the market had run out of sellers and short covering ensued. The end result for old crop was a modestly lower close but within the range of prices we traded in last week. The meal market, too, traded down to new lows for the current move but late short covering had prices finishing fractionally higher on the day. Bean oil continues to be the weak link as it registered new lows for the current down move and finished with new lows for the move. Overall I think the bean and meal market simply ran out of sellers and the idea of oversold took over.
Interior cash soybean prices are similar to that of interior corn prices – if they’re not steady they are running a shade higher. Producer sales are near non-existent with the low prices. The Gulf market, however, jumps a bit on the slow producer sales. Board crush margins continue to sustain their recent improvement which in turn allows processors to stand in with their bids. Soybean spreads ran softer on the day despite the steady to better looking cash prices. Offers to sell cash soybean meal remain in the dumper despite the idea of some processor downtime developing in the near term. Meal spreads ran fractionally softer within the old crop while old crop ran mixed vs. the new crop.
Once again charts are trying to advertise that we may have gone low enough for the time being. The move to new low ground in both beans and meal and then finishing within recent price ranges suggests this. Any ensuing rally, however, will be purely technical in nature. I’m not sure what to say about bean oil as nothing in Tuesday’s price says the decline is over other than a degree of oversold.
Daily Support & Resistance for 04/12
July Beans: $9.46 – $9.63
July Meal; $311.0 – $318.0
July Bn Oil: $31.75 – $32.40 (32.70)
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