Soybean Commentary
Jan Soybeans close 9 ¾ cents lower ($9.86 ¾), March 9 cents lower ($9.95) and July 8 ¾ cents lower ($10.10 ¼)
Jan Meal closes $4.6 lower ($308.3),March $4.5 lower ($312.1) and July $4.1 lower ($317.9)
Jan Bean Oil closes 26 pts lower ($34.86), March 28 pts lower ($35.12) and July 25 pts lower ($35.58)
Weekly Soybean Export Inspections – 1.578 M T. vs. 1.300-1.700 M T. expected
Soybeans and soybean meal try to rally Monday but fail to follow through. March soybean futures are now at levels not seen since mid-late November. Prices have been in a grinding decline dating back to December 6th. Bean oil stands in getting support from better palm oil prices. The meal market continues to be the primary drag on soybean prices. China reports that last week recorded its biggest weekly crush ever. Crush margins have been excellent for them but I have to think those margins should begin to recede given the flow of imported beans into their ports as well as increasing reports of bird flu throughout Asia. The weather in SA has been near excellent for soybean crop development. The Brazilian line-up for exports is starting to grow. With that said don’t be surprised to see US sales and shipments to China begin to decline.
The interior soybean basis ran mostly unchanged vs. last week. The Gulf market, however, jumps a bit as we move into January. Despite the stronger gulf prices soybean spreads were on the defensive all the way out to the new crop. Offers to sell cash soybean meal continue to soften. Meal spreads, like soybean spreads, softened all the way out to the new crop.
Soybeans grind lower into 5 week lows. March meal prices continue to honor the suspected support at $310-$309. Failure at that level could easily accelerate the current decline in both beans and meal. March bean oil has been consolidating against the $34.50 level. As long as beans and meal maintain their current grind lower bean oil will try and continue to receive left-handed support at that level. As we move closer to the USDA January 12th update the trade will try to assess what type of carryout changes can be seen. As of this writing what increases we may see in US demand could be offset by an increase in Brazilian production. Other than the bean oil price action which has turned almost neutral the price action in beans and meal continue to leave a lot to be desired.
Daily Support & Resistance for 01/04
March Beans: $9.90 ($9.85) – $10.10
March Meal; $309.0 (?) – $316.5
March Bn Oil: $34.50 ($34.00) – $35.65
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.